In debt too young

notanothergreyhair

Hi Jay,

Just wanted to say that the flipside to your thread title is this; although you may be young and in debt, you are young and have realised what being in debt means. I was in debt at 21 and I still am some 6 or so years later; well done you for addressing the situation now.

I'm sorry that I cannot offer you any practical advice, many others are here for that, I just wanted to say well done and good luck.

jay_woodfield34

thank you both for your support. I will be paid again next thursday so I have written in my diary to cancel that overdraft. I have just filled out the snowball calculator, so I have a basic idea of what to pay out. Not looking forward to this all at all

iluvfreebies

Well done you u have made the first step - its amazing how much better you will start to feel doing something about it. All the best xx

ifstar

jay_woodfield34 wrote: »

okay heres my monthly outgoings and income details. please be blunt

Income (after tax)
£140 private work
£1280 5-day full time job

Outgoings
£35 gym membership (which I use daily)
£40 mobile phone
£70 car insurance
£250 petrol
£160 food
£350 social
£40 football subs
£200 rent
£140 paying off existing HSBC loan wih £5,887 left to pay

I cannot think of anything else at the moment but i'm sure there are odds and sods i have not accounted for, but these are the main outgoings. As stated before, I also have a credit card debt of approx £3,000 on it. I believe the interest is around 15% on this and I have taken a head-in-sand attitude to this. As stupid as that sounds, I now realise I have to do something about it and fast.

I want to help myself out of this situation but do not know where to start. I struggle to get out of the £450 overdraft I constantly find myself deep into. I think taking out a large loan to consolidate all debts into one payment is probably a bad idea, plus the fact that I am likely to be rejected. Usually I would turn to my mum, but she has too many things to worry about recently. I do not wish to add to her troubles, plus I want to prove to myself that as I got myself into this, I can get myself out. I just need pointing in the right direction. In my present state of worry, I am prepared to sacrifice anything to get out of this hole i've dug.

Any tips on saving money in any way will be greatly appreciated too

Your food for 1 person (I presume) is quite expensive, don't shop on an empty stomach and see if you can cut back a bit. Some people can manage on £15 a week but I am probably close to £25 - if you can cut down to this sort of level you will save £60pm. Plan ahead what you are going to buy.

What is your social money for, is it just for going out to pubs/meals etc? If you really want to cut down your debt then you should cut this right down. You can either go out a bit less or try and spend less money when you go out. Take a set amount of money before you go out and don't take your card when you go then you can't spend more than you have got.

You should look to see if you can get a 0% on balance transfer credit card and transfer to this then cut up the old card. I would also cut up (or at least leave it in a drawer) the new card too - you usually shouldn't spend on the balance transfer card as new purchases always get paid off after the balance transfer.

It would seem your first thing would be to pay off the credit card (presuming you can't overpay on the loan) but if you can get the credit card at 0% interest then you will get on even quicker.

Finally I would recommend buying "The Money Diet" - play.com is the cheapest. You can find pretty much all the information thats in the book on this site but its handy being all in one place. Your car insurance is quite pricey but that is probably due to your age, but you could maybe shop about and see if you can get it cheaper.

Hope this helps

KiKi

jay_woodfield34 wrote: »

okay heres my monthly outgoings and income details. please be blunt

Income (after tax)
£140 private work
£1280 5-day full time job

Outgoings
£35 gym membership (which I use daily)
£40 mobile phone = can you get a cheaper tariff by calling your provider?? I get 300 free mins and 400 texts for £25 a month on O2.
£70 car insurance = go to www.moneysupermarket.com and compare you current rate to others, then change if appropriate
£250 petrol = can you cut down on this by car sharing, taking a bus for longer journeys? It's not quite so convenient, but changing this now might save you some valuable pounds.
£160 food = I feed myself and two demanding cats on £70 a month by planning meals and taking lunch to work, and not eating out. You can cut this by half if it's only you.
£350 social = Okay, being blunt. You're in debt, yet still spending £350 on a social life. £87 a WEEK. Your HSBC loan is taken care of, so if you stopped this for a year, you'd almost pay your Credit Card bill off in a year.
£40 football subs = again, you don't have to pay this. If you really want to get out of this situation quickly, cut right down for ten months and you will do yourself a HUGE favour! You can then put it down to a lesson learnt and move on before you're 23!
£200 rent
£140 paying off existing HSBC loan wih £5,887 left to pay

Any tips on saving money in any way will be greatly appreciated too

Do not consolidate into one loan - that's important. Get yourself out by changing these habits now. You could do it in a year if you really cut down. You haven't accounted for birthdays, Christmas, clothes etc, so you still need to start saving.

The good news is that without the CC debt, you're managing. Cut down as MUCH as you can. Ask questions on here, get some support from others, and you will be able to pay off your CC.

The really good news is that you've recognised this early and that it's panicked you - forcing you to get out now! Better that that three years on when you're £30K in debt with interest rates of 29%!

HTH

KiKi

little_miss_troubled

jay_woodfield34 wrote: »

thank you both for your support. I will be paid again next thursday so I have written in my diary to cancel that overdraft. I have just filled out the snowball calculator, so I have a basic idea of what to pay out. Not looking forward to this all at all

Hi Jay

Make sure that you defintely can afford to clear your overdraft off in one go. You dont want to leave yourself short through the month.

An idea maybe is when u get paid - call the bank & reduce your overdraft by £150 or whatever you can afford. Do that for the next few month O/D is cleared or if u can pay it off but as I said makes sure you leave yourself enough and your not caught short

NatashaP

Just wanted to say you are not alone and certainly not the only young person in debt. I am 24 now but got myself £15k into debt by the time I was 19! No real advice to give you as just started to sort my own debt out but wanted to say you are in the right place and with this lovely bunch of people you will never look back, always forward! Being in debt is horrible but this place really does make you feel more positive!

Stick around and you will soon see yourself on the road to debt-freedom! Good luck!

doodledo_2

Hi and welcome to the forum.

Some brilliant advice already.

Have you got an capacity to get a second income, maybe a bar job or similar?

Have you got anything you can sell on Ebay, Amazon etc.

Good luck with your journey.

G-G_4

I'm 24 and just gone bankrupt with 45k worth of personal debt...

Youa re being very brave and very mature by dealing with this now. If I had done the same at 21 I would not have got into the mess that I did. So well done and good for you.

The food shopping, socialising and football thingy have to be cut down if you want to get out of this.

You can do this! You need to cut back on some of the pleasures in life for a year and this time next year you will be in a much better position and will be much happier for it.

Good luck, it isn't as hard as it seems... you just need to be strict with yourself and persevere.. it is worth it..

x

beanielou

The glaring thing as has been said is social.Even if you could redude that by half it would be a big help for you.