In debt too young

fluffymummy

You need to move your credit card to a cheaper 0% one, and maybe see if your loan would be better switched. http://www.moneysavingexpert.com/loans/cut-existing-loan-costs
But BEWARE! It isnt always the best thing to do.
Well done for trying to sort your debt out. Im 34 and have only just realised I need to sort it out. Do you have children?

maat55

To add, Dave Ramsey has a book called Financial Peace, it will give you a complete understanding of how to manage your money. It's great that you are dealing with this at a young age. I was 40 before I started. Today I only have 3200 dollars I owe and will be paid off in three months. Good luck.

bored_of_debt

jay_woodfield34 wrote: »

I'm 21 years old and currently in approximately £8000 of debt. I'm in desperate need of help and hope i've turned to the right place.

I have a loan with HSBC with £5887 left to pay. I pay a fixed rate of about £140 per month on this. I also have a credit card that has about £3000 on it. I seducted last year by the "no interest on payments" title and haven't been able to pay anything off. Now the interest has started and i'm scared i'll fall into a neverending circle. Ontop of these two, I am £450 into my overdraft.

I earn approx £320 per week (outgoings = £160 per week) but no longer have the time to pace payments out. The credit card bill is rising due to interest and there doesn't seem to be a light at the end of the tunnel for a long time. All i want to do is get out of this stupid mistake i've gotten myself into now that I have learnt a very harsh lesson. I have thought about getting a larger loan to consolidate existing debts, but that would leave me £270 per month out of pocket.

Can anyone please advise me on the best steps to take? I would be extremely grateful

Try not to panic too much mate, your situation isn't good but it could be a lot worse! It looks as though you can resolve it fairly easy...

When I was 21 I was £20,000 in debt, I began to panic but then realised that it doesn't help. Take a deep breath and think proactivly and you'll be fine.

You can look at this scare as a good thing at this age, as your bound to be a lot more careful in future...

chin up

asp746

hi jay,
you're doing the right thing -bite the bullet now. its not going to be easy but doing this now will set you up for life later on. It gets harder to clear debts the older you get and the hardest part if the first few months while you're trying to adjust to the new budget regime. just remember its not forever and thank goodness you're young and got not children/mortgage etc.

looks to me like you've got to cut your socialising. that seems really expensive. if you're going to the gym every day you know how important it is to look after your body so i can't figure out that's all on clubbing and alcohol??

good luck

bathgatebuyer

Like all the others, the 'social' thing has to be looked at - that's a mortgage to a lot of people I know how important health and fitness is to me, that not going to the gym isn't an option as I just turn into a grumpy (and fat!) cow if I'm not there all the time, so keep that on if you're using it daily - same with football too. However, you're going to have to balance that up with your food and socialising spending. If you can half both of those things each month, you'll be able to put a substantial amount into tackling your debt.

I know it's great to be out and about with mates, but you have to learn to say, "No" and get used to the occasional night in. I know, I've been there. You can still have people round, have wii nights, poker nights, etc, etc, where everyone brings there own booze. Ok, it's maybe not as much fun as being in a pub or club, but when the bills come in, you'll know you're making concessions to meet your debts head on. Afraid it does hurt and you can feel left out at times, but it's best to sort it out now than exacerbate it.

jay_woodfield34

Thanks again to everyone for the advice and support. I started a diary today and have only spent £5.30 all day. Sounds sad, but i'm pleased with that, considering a sunday I usually end up £30 down. I didn't go to the pub, but had a few mates over after football today instead. It's only been 24 hours since i started my cut-down, but i feel a lot more conscious and aware of my money already, as opposed to having a willy-nilly approach to my wallet.

Your comments have lifted me and I do feel this is all achievable. As Kiki said, if i rid myself of the cc debt, I can manage again. So my goal is to have the cc cleared completely before christmas. My social spending is not all on clubbing and alcohol. I'm a generous person, in that I buy breakfast for people or take people out as 'my treat'. Now it's all in black and white I can see how much this is a major setback for me and I HAVE to do something about it. I do not have children either. My full-time job is demanding. I leave home at 6am and get back around 5:30-7pm and do a cash in hand job on a saturday morning which helps, but getting another job seems a bit far fetched.

I will look for 0% balance transfers as soon as I finish typing this so thats another positive for me. Oh, and i've made a packed lunch for tomorrow

KiKi

Well done on the packed lunch - gold star!

A heads up - taking a packed lunch *does* get tiresome about a week in...so you have to really stick with it. Then once you're past that, it's easy! Also, don't be tempted to still buy an extra packet of crisps, or an extra drink, or a latte at break time.

You can do it! You can. Check out the 0% transfer...you'll have to pay a transfer fee, but it might outweigh the interest, so you'll need to do your calculations to see which makes you better off.

KiKi

debt_free_me

Hello.

Looks like you have already got loads of advice on here. I am in a very similar situation, being in 8.5k debt at 23! Not the most ideal situation but atleast I am now dealing with it. Had a rising debt for a few years and today I consolidated all my debt into one loan with a lower interest rate. I know this means interest so it's a bit more than 8.5k, but for me personally, it's the only way I know I will pay it off, otherwise i'll end up never paying it off! I am planning on saving in another account to pay it off early. I know people will say i'm silly doing it this way, but I need the discipline and the direct debit being taken out every month is forcing me to pay it. Just remember you are not alone and the fact you have faced it now means you will pay it off earlier.

I am on this site almost everyday, looking at suggestions for making more money and getting inspiration from others in debt. I'm sure you will find it extremly useful.

Good luck

Debt Free Me

hbl_2

You earn more than I do and I managed to pay off my £14,000+ grad loan in 18 months (plus credit card and £1500 of my overdraft so probably closer to £16000).

Have yourself a frugal month - live without a social life for 4 weeks and try to not to spend any money on any non-essential. Then take the money you have left over and pay a chunk off your credit card. It'll give you some idea of what you can achieve in a small space of time.

One of the things I did that really helped was to open a second bank account which I siphoned money into which I could spend on anything. Socialising, eating out, drinking, books, CDs, video games etc without feeling guilty. But when it was gone it was gone, and if I wanted anything else, I'd have to a) work extra b) sell something c) go without.

If you can't pay back your loan any quicker, you can use the money you save by shredding down your budget to save for your future. £100 a month saved now at age 21 will be worth a very tidy sum in 30 years time, think a cool million. That's the power of compound interest. Make the habit now and as you get older and earn more, it will be so ingrained you'll be wealthy sooner and longer.

It may seem daunting, butin reality it's not so hard when you get into it.