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£24,000 in debt at 22!
I almost feel embarressed writing this e-mail and often wonder how I actually managed to get into this much debt! Basically it all boiled down to being a prat when I was 18/19, I had an expensive car on finance £16,000 got banned from driving about a year after I got the car. When I got my license back I was paying £4000 a year on insurance which I couldn't afford so I got a loan out. After realising that keeping my car wasn't going to happen I sold it for £9500 when it was two years old and still had quite a bit outstanding on the finance. From there on I cant really remember but now im 24k in debt at 22, I fell like I am the only person in the world like this even though I know some people are in the same boat. Has anyone else been in this situation and come out on the otherside?
My friend got into 60k worth of debt at 25 and went bankrupt and I really don't want to end up like that. I keep beating myself up emotionally and thinking of all the mistakes I have made and what my life could of been like. My girlfriend knows of my situation and is supportive but I feel like I am holding her back because she wants to get a house with me and I cant afford it. I live with my parents at the moment so I can afford to pay what im paying without a house.
My current loans and cards:
Egg loan: £12,000 @ £340pm (3 years remaining)
Intelligent Finance Loan: 10, 000 @ £120pm (7 years remaining)
Credit Cards
Egg Card: £838
Capital One: £1330
The spening on my credit cards has been due to overdraft balance transfers as I keep overspending my wage every month. It seems to be a vicious circle that im getting myself into again.
I feel like such an idiot. I know things will get better once I pay off my £340 a month loan off but I just feel so trapped.
Does anyone have any practical advice for me or words of encouragement because I could use some :-( Anyone been in the same situation as me?
Also forgot to mention my current outgoings:
Phone: £40 pm (Average)
Broadband: £37pm (1mb connection)
Petrol: £50pm
Gym Membership: £44pm
Credit Cards: 50pm
My salary is £1022pm after tax
My friend got into 60k worth of debt at 25 and went bankrupt and I really don't want to end up like that. I keep beating myself up emotionally and thinking of all the mistakes I have made and what my life could of been like. My girlfriend knows of my situation and is supportive but I feel like I am holding her back because she wants to get a house with me and I cant afford it. I live with my parents at the moment so I can afford to pay what im paying without a house.
My current loans and cards:
Egg loan: £12,000 @ £340pm (3 years remaining)
Intelligent Finance Loan: 10, 000 @ £120pm (7 years remaining)
Credit Cards
Egg Card: £838
Capital One: £1330
The spening on my credit cards has been due to overdraft balance transfers as I keep overspending my wage every month. It seems to be a vicious circle that im getting myself into again.
I feel like such an idiot. I know things will get better once I pay off my £340 a month loan off but I just feel so trapped.
Does anyone have any practical advice for me or words of encouragement because I could use some :-( Anyone been in the same situation as me?
Also forgot to mention my current outgoings:
Phone: £40 pm (Average)
Broadband: £37pm (1mb connection)
Petrol: £50pm
Gym Membership: £44pm
Credit Cards: 50pm
My salary is £1022pm after tax
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Comments
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cut down on phone, broadband connection and gym membership frees up a fair bit for starters, try and buy weights you can use at home/jogging etc, reduce the broadband speed to 512MB say and get a PAYG mobile or reduce your usage. Probably c.£80 savings there to put towards payments0
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Have you seen The Bank of Mum and Dad, BBC2 9pm on Tuesday. People in debt let their mum and dad take over their finances for a week and sort em out. V. practical advice and also make you realise you're not the only one!
Also look at Depression in debt 26 lots of tips on here and similar situation0 -
current income = £1022
current outgoings = £781
left = £241
as woby_tide suggested, reduce broadband, stop gym, change phone will increase left £321
what other expenses do you have?
housekeeping?
food?
social?
clothes/cds/dvds etc
insurance?
other suggestions are
make up a spending diary.
make a note each day of every thing you spend over the course of a couple of weeks.
then sit down and see where you money is being spent.
what is the % for your Credit cards?
make extra payments to the one with the highest % rate.
can you make over payments on your loans?
if you can when the credit cards have been paid off, start making extra payments of loans.smile --- it makes people wonder what you are up to.... :cool:0 -
When I first saw this I thought "wow, my son has been listening, and found this site at last", your stories are so similar. Expensive car, driving ban ( only six weeks in his case - not enough in my opinion), high insurance - but he is only just turned 21, and his debts are not quite as high as yours - just!
He is hoping to sell his car for just enough to pay off the finance - so that was an expensive car rental for just over a year.
Like you his insurance was £3800, and he had to borrow that from his gran - and is still paying her back.
Take heart, it does seem to be something young men all have to get out of their system, I hear the same story so often from friends with sons of the same age, and at least you are now addressing the problem.
You don't say what interest rates you are paying on your loans. If you have had them for some time, and as long as there are no penalties for early repayment, you may be able to get a cheaper loan. If you cannot because of your credit history, would your parents be prepared to take a loan in their name for you?
I notice you have an Egg card, and they are offering loans at 6.9% during October. If your payment history with them is good you could try asking them for a loan. Whatever you do don't do multiple loan applications, they will all search your Credit Reference file, and that will look bad.
Good luck, you've come to the right place for all the support you could ask for.0 -
thanks for the replies
@ MM
I think the interest on my egg loan is 7% and my if loan is around the same....
My if finance loan was only for 8,000 sorry but with interest in came up to 11,000 although I have paid nearly a years worth of payments off that.
I never miss a payment and would imagine I have a pretty good credit history. I have only ever had a couple of late payments on credit cards over the last 4 years.
I can cope with the level of money im paying off but it's far from ideal, I don't get as depressed as I used to do about money but it's always in the back of my mind. It makes it worse because my girlfriend is ridiculously sensible with her money and doesn't owe anything and has a few thousand in savings. I hate i t when we go to cash machine and I deliberately look away while she checks her balance. Sounds stupid doesn't it!
How is your son getting on with sorting his debts out? I know how he feels.
@ woby_tide
I've been thinking about getting a pay as you go phone instead and also cutting down the broadband. I will hopefully be getting free gym membership soon as I am on my clubs squash first team which entitles you for free membership. Thanks for the advice matey.
@ robyne
My left over money gets spent on general living. I probably spend about a 5er a day on lunch :-(. thats £100 a month at least :-(. I think a spending diary could be very useful, thanks for that mate.
@ Jen_Jen
I will watch that T.V program, sounds interesting.0 -
It's a start, admittedly it all depends on your phone usage, by rights PAYG may be a bad option and more expensive, how far are you into a contract, there may be a new offer out that is more suited, maybe try a sim only deal this time around(https://www.forwardcellualr.co.uk or somesuch) and use existing phone which will make it cheaper over year as handset subsidy will go on your line rental.
Broadband, again not sure what you use it for but in most cases unless for specific reasons people could get away with 512mb instead of 1mb.
The gym bit sounds fairly good news as well.
Picking up on your £5 per lunch, I know it's a bit sad but can you not maybe make your own some days(I knwo it's not always possible depending on jobs etc.). That way you can be using food that is probably already at home(included in your rent/board to parents). I've done this for last few months purley because wife is pregnant and was rubbish at getting away from desk to buy a lunch so I forced her to take sandwiches in and joined her to make sure she did, I'm quite surprised at the difference it makes, like you I'm about £20 better of a week(I still eat once/twice a week from work/pub) but it still adds up. Good luck anyway.0 -
Sounds like you have got it on pretty good interest rates anyway, so just keep plugging at it.
My son has just got quite a large(ish) amount from Children's Bonus Bonds which matured when he was 21, so he should be able to settle his credit card out of that, which just leaves the loan for the car - which I think is just under £11000, and the balance of what he owes his gran. He expects to get more than £11k when he sells the car, so that will only leave the debt to his gran - which is virtually interest free.
As he has cut down his hours at work to concentrate on developing his own business selling the car is quite vital to the plans. In any event it will be going SORN very shortly, as the insurance and car tax will soon be due again, and he can't afford it. Guess who's car he will be using then!!!
As I said before, I guess most 18-19 year olds have to have their flash cars, get it out of their system, and then settle down to more sensible levels of expenditure. At least you have learnt the lesson before getting into huge responsibilities and even more debt.
Keep up the good work.
MM
edit: £5 a day for lunch does sound a bit excessive, what on earth do you get for that. Take sandwiches - it's much cheaper.0 -
Picking up on your £5 per lunch, I know it's a bit sad but can you not maybe make your own some days(I knwo it's not always possible depending on jobs etc.).
you beat me to it.
making your own packed lunch...... one of the easiest ways to save money
i even have marmite or choccy spread some days.... just like the kids..... ;D
even on fridays, i take sandwiches, but still go to pub at lunchtime for a couple of drinkssmile --- it makes people wonder what you are up to.... :cool:0 -
Hi!
I read your post and wanted to reply to let you know you're not alone in your situation!
I too am 22 and have approx £25k debt (but shared with my boyfriend). It started from getting a car loan aged 19. Not knowing anything about APR's etc, the lovely LloydsTSB sold me a high interest loan with a few thousand £'s of payment protection insurance on top! Add a couple of credit cards and it spiralled from there really.
I was lucky enought to get the 0% barclaycard, and have 3.9% texaco, mint and capital one cards so although my debt is spread about, I am paying less interest than I could have been otherwise (Thank God for Martin and the users of this site ;D, otherwise I think I might have gone under by now )
To try and keep myself on track I have compiled a spreadsheet of all my debts: who to, how much, payment date, apr, etc etc and every pay day I pay all my debtors and mark it on my spreadsheet. I also keep a running total of how much I owe. It's a great feeling seeing that amount drop each month
I guess my main tip is to stay positive (easier said than done!!) It is very easy to feel depressed but try to tell yourself although its difficult now, we have got into debt at the right time of our lives. Much better now than when we could be risking our homes on secured loans and have kids who depend on us, etc etc.
Also without wanting to sound all 'preachy' but we will learn a valuable lesson from this. I know for sure that when I am 100% debt free (September 2008!), I sure as hell ain't gonna let myself get into this kind of debt again!
So Good Luck and remember you are not alone. Although I don't post very often, I know from experience that the guys on this site are a great support.
LeaI say what I like, I like what I say!0 -
You say you have a good credit status could you get one of the 0% deals and start tarting even if you save yourself some interest it will clear the debt quicker. (the egg and capital one)
Just remember to pass the card to your sensible girlfriend for destruction so that you arn't tempted to spend on it.0
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