Newbie debtor.

R.A.S

Good day Money Saving Experts,

I seek advice.

I am a 19 year old Scottish student (studying up here) and I seem to be racking up a fair bit debt (well for me at my age it seems a lot). I've managed to acquire two student accounts (stupidly with RBS and Natwest) and their accompanying credit cards(£500 each). All of which are more or less maxed out, taking me to £3260 in the red. This does not include my student loan, which i'm ignoring at the moment.

Is this normal for a 2nd year student? I worked over last summer and came out at the end with little to show for it as it got quickly absorbed and then respent. I'm busy with studies and socialising so find it hard to find part time work that suits my hours, but I need a way to start managing my money pretty quickly.

Is it adviseable to take out a loan and pay that back monthly? As to free up my overdrafts and pay off my credit cards? Or should I leave it as is and budget better and look at working again in the summer and picking up part time work? Or should I stop worrying and enjoy probably the best 4 years of my life?

My current income is £400 a month from SAAS. I'm horrific at budgeting and like to scoialise, so this disappears fairly quickly.

Any advice is helpful,

Thanks.

RAS

Hi alterego

Do NOT take out a loan.

Look here and post up your SOA. http://forums.moneysavingexpert.com/showthread.html?t=107280

I have to be away in a few minutes but others will help you sort out your budget and debts.

tealady

Socialising costs as you will have found out. Try the usual studenty tips like spen a few hours working 1st and only gou out later in the evening. By that time you will only have time for a few drinks.
Check out student nights as well.
Or get work in a bar 1 night a week, you will meet people and make money.

Sea78

I would also stress not to take out a loan. Also if you do continue, while having a fab time, it will be a major debt headache when you finish and be a real hassle if you want to travel, or move elsewhere for work etc.

While you say you aren't good with money - it would still be possible to cut back on areas - food bill - do you always eat at home or do you buy a lot out? If you are spending on alcohol and nights out this is one area oyu can cut back on. Also, surely others are also struggling with the money, so perhaps more parties/get togethers at peoples houses would cut back on the cost?

Sea xx

redrabbit29

I disagree about a student loan being a hassle and a big part of your future life. I have about £11'500 student loan.

I am in a job now where I earn £23000 per year (not including over time), and I currently pay £60 a month as part of my loan. After tax and everything I then have about £1270 net to go towards bills/rent and everything else.

Although I agree about not running up a student loan if you can, I would say it's better to have a student loan than credit cards or bank loans or other types of debts. I don't even consider my student loan as a debt or expense, as I doubt I'll ever pay it off (not over the next 20 years anyway).

Sea78

Hi redrabbit29 - I think what the OP was referring to was a consolidation loan to clear the debts so that they still had the overdrafts and credit available. I think they have already got the students loans.

Sea xxxx

R.A.S

@RAS
Thank you, namesake. I've tried to compile and SOA as best I can. I'm sure i've probably missed stuff though.

Monthly Incomings:

Student Loan - £160
Student Bursary - £251

Total - £411

Monthly Outgoings:


Mobile Phone - £41
Food - £150
Nights out - £300
Travelling - £36

Total: £527


Natwest Student current account – Balance -£1,186.45 (overdraft limit £1,400) 0.0% APR

Natwest Student Credit Card – Balance -£451.13 (limit £500) Typical 18.9% APR

RBS student current account - Balance -£1,205.00 (overdraft limit £1,250) 0.0% APR

RBS Student credit card - Balance -£440.65 (limit £500) Typical 18.9% APR

Total: -£3,283.23

The outgoings vary depending on how many times a week I go out/eat out. And does not include other expenses. The occasional clothes shop for example.

@tealady
I'd love to find a job I can work a few hours a night then go out. It's hard to find a job with such hours in a city saturated with students, however.

@Sea78
I buy out a lot. Very rarely cook myself. Another problem for me. Although the place I eat is farely cheap in comparison to your average takeout. If I eat out I'd normally spend £3-£4. Maybe 4/5 times a week.
I'd rather not cut back on going out etc. As i'd rather have my good times at uni and worry about debt later, although i'd also like to start managing my money better as to make it easier later on.

@redrabbit29
I was enquiring to a bank loan. I already take my full student loan and haven't included that as part of my debts.

neverdespairgirl

It's possible to have a great time at Uni, get a good degree, and not emerge maxed out on credit cards and overdrafts (student loans are different, though).

You need to earn something. You said you earnt over the summer, what happened to the money? If you get a job @ £5 an hour for 40 hours for a couple of months over the summer, that's £1,600 to knock off high-interest debts like the CC. If you can get £8 an hour, that's £2,560.

Working a few hours a week is both possible and a great idea. How about Saturdays in a shop? Or nightwork once a week, stacking shelves? Even 8 hours a week at £5 an hour makes quite a difference.

R.A.S

Was looking through my mail and Egg have sent me stuff regarding their Egg Card. Would this be useful to take on all my debts, allowing me to close my two open credit cards and one of the student accounts? And manage it all through Egg. It's offering 0% on balance transfers for 15months. Is there a catch to all of that?

neverdespairgirl

The catch is, you are heading for a major debt problem. You can't just spend way more than you earn, and worry about it after you graduate.

A certain amount of student debt is inevitable unless you have very rich and generous parents. But you are heading for a LOT more than that!

You need to earn more, or spend less.

R.A.S

I know I need to get myself into some employment. Which is my goal at present. But for now i'm more looking at the two credit cards and student accounts. I technically shouldn't have the two student accounts and was checking if it's advisable to pay off the overdrafts with the Egg Card and closing one of the accounts? Just as a short term solution.