In lots of debt and need help getting out.

spareapenny

foxygloves

I'm intrigued how you manage to feed yourself on £60 a month…..unless you are a very keen forager.

Unfortunately this means usually eating the same stuff, for every day, for every month. It's not great but it gets me through.

fatbelly

Throw your surplus at that Drafty thing. The apr is ridiculous. Aim to clear it by October

II think I would have a look at your council tax website. If there is a box to tick for 12 instalments it should lower your payments. I think that is to become the default option from next year.

Do you not use credit cards at all? Could you trust yourself with one? Be honest.

Hi, yeah, I will do that on the council website. No brainer really not sure why I never thought of it. I'm going to be late in council tax this month but I should be able to clear it by the 7 days they're supposed to give you to pay it.

I've made up a plan to clear the loan with Drafty, but there's a few things I need to think about

1. Should I be putting all my weight towards one loan, or split it equally towards all my loans?
   
2. If I clear the loan off less aggressively, I will have more disposable income to save. As it stands, I will have no savings until the 25th of September, which is a pretty precarious position to be in. Should I prioritise paying off slowly to build a safety net, or pay off quickly to avoid less interest?
   
3. Should I use my overdraft to clear the loan quicker? My overdraft has less interest than the loan itself!

As for credit cards, I have one Barclaycard which I have with a £1350 limit for emergencies. It has no balance on it. Being completely honest, I think I can use it responsibly because of the situation I find myself in now. It's a very eye opening experience.

Although I have considered just maxing the credit card with brand new tech, selling it for cash, recovering, and then dealing with the credit card debt later, but I realise the way out of debt is not more debt.

Here's a plan I've come up with, that leaves me with disposable income after paying. I am genuinely being saved here by the rent-free month in July, but I also have some things that could fetch money (as un-ideal as selling my phone is)

Month and Date	Start	Finish	Spent
5 June 2026	£2042.15	£1709.15	£333
3 July 2026	£1802.45	£1152.47	£650
31 July 2026	£1215.38	£665.38	£550
28 August 2026	£701.70	£0	£701.70

Sorry I don't know what this is, and I can't get rid of it. 

RASI'd suggest you have a core budget that ensures you can pay your rent and essential outgoings every 4 weeks. Once a year, you'll get a rent free month when you can afford major items. The amount of "spare" you've got to make payments that are time bound will vary from month to month.

With respect to the £50ish monthly travel, you need to be able to fund from your core budget, so it needs it's own budget line. Work put the maximum each 4 weeks and budget for it.

You also need an instant access ISA into which you pay one 1/13th of the annual water charge each 4 weeks, so when it become payable you have all or most of it to hand. Rather than discovering that it's a tight month and you are scrabbling around, dipping into the Drafty account.

So where do you recommend that I manage this budget? My bank "Monzo" has pots? Is that what you're talking about? Does not paying the water charge into an ISA for a bill due in December reduce the amount of available money I have to deal with problems today?

You can only make knickers and socks last so long, and nothing is so much fun as leaking sneakers in cold or snowy weather, so have enough to buy boots and dubbin or wellies if needed. This isn't nesh, it's just making sure you have the wherewithal to maintain your biggest asset, yourself.

That's fair.

Now find the last 6 month's statements and go through them with a fine-tooth comb. You still haven't worked out where several hundred pounds are leaking. That's money you need to pay off your debts and until you find out where it's going you can't harvest it to sort out your debts.

So look at the categories above and see which fits, or create your own specific pay subscriptions for anything, buy games stuff, go out with mates.

No-one's dictating what you spend on but you can't make real choices until you know where it's going.

I will do that, although I probably will see that I spent far too much on take-out, Pret coffees, meal deals, and so on. It's a hard truth to face but it's better done sooner than later.

I will also look at selling some of my stuff. I can do without a flagship phone, I can dry my clothes on a clothes horse, etc.

Finally, I have been looking at ways to make money. Obviously bank switch is one of them (which is great for me as I've been looking to switch). Do you think that doing courier work for Deliveroo, Uber Eats, etc, is a way to make a decent amount of extra money? I would have to take the risk of hiring a bike and hope that the earnings outweigh the costs. I don't know. There is no overtime at my job.

RAS

If it's easiest to just use Monzo pots for water and your hair/clothes, then start with that. But don't use the money in them to pay for anything else. It's the discipline of saving for known expected future bills that you need to learn.

If you know you buy Christmas presents or travel to family twice a year, budget 1/13 every pay period. That way you pay using money you have, rather than using credit, which leads to repayment problems when you have a lean month

Once that's installed and you get to September, on your plan, you need to rigourously put away a small amount of money each month towards emergencies. I'd start with £50 every 4 weeks. Eventually you need enough to pay for a rental deposit and moving costs, or a month off sick.

RAS

Take away, Pret's, coffees and meal deals are food and drink so need to be accounted for in the groceries budget line. So what's your real spend on food and drink?

And maybe consider whether you prefer paying £6 for one meal deal or an extra £5 a week on the food budget if you swap one for a home made pasta bowl, using pasta cooked for another meal, mayo and some protein. Buy a multi-pack of crisps once a month and some fruit.

RAS

You said you've stopped gambling?

So what do you think buying tech for resale is? What makes you think you can offer better deals than the massive warehouse dealers?

And unless you've already got Deliveroo experience, signing up for a bike would be madness.

You can't spend you way out of debt. Particularly if your plan is to incur more debt in the hope of doing so.

fatbelly

Your savings may get 5% if you are lucky. That Drafty thing is charging you apr 95%. There is your no-brainer. If it was me, I'd stop paying things that I could get away with (water comes to mind) and chuck everything at Drafty. Then close it and never go near it again.

ManyWays

I probably will see that I spent far too much on take-out, Pret coffees, meal deals, and so on.

And if you try to live on £60 a month groceries, this will happen again and again. You can live on that for a month, but it is not a long term plan to clear large and expensive debts.

I suggest you put the groceries up to £150. And add in £20 a month for clothes, £20 more for entertainment, £20 for emergency fund, £10 for medical. That is still a very "bare bones" budget: £300 for groceries would not be queries by a debt adviser.

AntoMac

To echo what @dnpark38 said can I also suggest giving Christians Against Property a try? Nothing ventured by giving them a try.

Also, this crazy expensive Drafty thing. Is there a possibility of a loan from your parents to get shot of it, with you paying them back at a much lower rate than 96 pc? Maybe it’s too delicate to raise with your parents but just a thought. If they’re covering your phone it sounds like they’re generally supportive.

Sounds like this is giving you considerable stress. Well done for facing up to it. You CAN recover from this 👊

13thlegion

The advice so far is aimed at getting your mindset to the right place. You have 2 competing priorities right now that in their resolution can actually be mutually supporting.

1. The need the have a realistic budget that is accurate, livable, and forward thinking.
2. The need to address some nasty lending terms ASAP.

for 2 you know what to do. Throw as much money as possible at them. What is less clear is how.

Solving 1 will do that.

From my own experience what was the biggest enabler for getting finances under control was taking an annual mindset and using pots function of my bank account. It takes time to get completely right but quickly got me making progress.

So consider how much you have coming on and out over a year. Use the last year of bank statements to give you actual figures. Down to the penny on everything. Everything matters. E.g.

• Xmas and presents
• Trips
• Atypical/ not monthly spends
• Emergencies/unplanned expenses
• Anything edible or drinkable is groceries
• Anything wearable is clothes
• Anything in free time is entertainment

Divide the totals by number of times you are paid (in this case 13) and each month put that much in a dedicated pot. When the time comes to pay for each thing you will have what you need ready and not have to rob Peter to pay Paul each month.

And always make sure one of the pots is for emergencies only. This will grow and mean you don't have to rely on credit anymore.

Once you have this budgeted you will see what you actually have available to pay the debts.

sourcrates

If it were me in your position, my priorities would need to change, you can`t go on robbing peter to pay paul, hoping that your bank does not suddenly withdraw access to your overdraft, which can happen.

Your attention should be drawn to getting rid of the current debt, and putting all thoughts of a mortgage on the back burner for now.

£60 a month for food is absolutely insane, and I would say quite dangerous, I spend that every 2/3 days, and I`m a single person home.

I would suggest a version of what fatbelly advises, but I`d go scorched earth, stop paying all the non essential debts, for a good while, get yourself in a better place financially, with some savings, you need a firm secure financial base to start from.

By this time, with luck, your debts will have defaulted, maybe been sold on, or assigned to collectors, you can then choose which to make settlement offers on, hopefully they will be available to you, if not wait until they are.

Your credit file will recover in 6 years regardless of what you do, but taking out a mortgage whilst servicing debt you can`t afford, would be a silly move, and you would likely be rejected anyway.

spareapenny

Hi all, thank you for your comments, I fully agree that I need to better understand where the money is going, especially things I can cut back on, or impulse purchases, etc. This will help once I have a solid financial foundation and it will stop me from spending more than I have or want, if everything is budgeted and accounted for and in a pot or ISA.

Also, this crazy expensive Drafty thing. Is there a possibility of a loan from your parents to get shot of it, with you paying them back at a much lower rate than 96 pc? Maybe it’s too delicate to raise with your parents but just a thought. If they’re covering your phone it sounds like they’re generally supportive.

That is spot on, if I needed a tenner or twenty or maybe even fifty/hundred I'd feel comfortable but asking for a £2000 loan because I can't manage my finances, well… I don't think it would go down well. You took out a WHAT? If I were them I'd be concerned I'd crap their £2000 up the wall and ask for another!

If it were me in your position, my priorities would need to change, you can`t go on robbing peter to pay paul, hoping that your bank does not suddenly withdraw access to your overdraft, which can happen.

Your attention should be drawn to getting rid of the current debt, and putting all thoughts of a mortgage on the back burner for now.

£60 a month for food is absolutely insane, and I would say quite dangerous, I spend that every 2/3 days, and I`m a single person home.

I would suggest a version of what fatbelly advises, but I`d go scorched earth, stop paying all the non essential debts, for a good while, get yourself in a better place financially, with some savings, you need a firm secure financial base to start from.

By this time, with luck, your debts will have defaulted, maybe been sold on, or assigned to collectors, you can then choose which to make settlement offers on, hopefully they will be available to you, if not wait until they are.

Your credit file will recover in 6 years regardless of what you do, but taking out a mortgage whilst servicing debt you can`t afford, would be a silly move, and you would likely be rejected anyway.

I did spend lots of today thinking about how I am going to get out of this hole. Every month I start with a £1000 less off my salary, and then finish with £1000 in overdraft as I don't make enough to both pay my bills and stay out of overdraft with a hole that big.

I decided that the way forward would be to redirect my pay to another bank account, so that I have my whole salary (which covers all my bills, and gives me more to put towards drafty), and then make manual repayments of £100 per month back to Monzo to bring the overdraft to a close. To my relief, Monzo are okay with this plan. I've also decided to sell my phone (+£350-ish) and downgrade to make some cash.

As for the food situation, it's temporary so that I have more to clear debts. Yes, ramen and sardines aren't great, but they get the job done. This is not my normal spend on groceries, don't worry!

I can't default. They'll take me to court, give me a criminal record, take all my stuff off me (leaving me to twiddle my thumbs in entertainment), I'll have to disclose a conviction to my employer and probably won't have a job much long after. And, let's say that by 2028 my finances are better, good emergency fund, good amount saved in an ISA, etc, etc. That it lasts for six years on the file means that I won't be looking at any kind of credit, mortgage, phone contract, broadband, current account, car finance, maybe even if I rent another house they won't let it go ahead… UNTIL 2032!!

I could live with not being able to take out credit, but sadly credit scores are just reaching into every facet of life.

It's a tough situation, but I think I see the way out now.