Only Small-ish Debt But Want To Stop Before Gets Out Of Control

antneal7

I am 23 years old and i have a few debts that are outstanding and need help on how to clear this asap and stop it from spiraling out of control.
My current debt is as follows

Overdraft- £750.00
Credit Card 1- £2,200
Credit Card 2- £1,500
HSBC Loan- £850.00

I have transfered one of my balances to a new card so credit card 1 has 9 months balance transfer on it which is ok.

Just wondered if anyone has any tips or things to do that you could pass my way.

My annual salary is £12,000 before tax and my monthly outgoings stand at around £550.

Please be gentle it is my 1st post.
p.s. Martin Lewis is a true legend

Merlot

Can you please post your outgoings too, so we can have an overall picture, my advice to you is do not consolidate it rarely works (with a loan or a remortgage), only do a balance transfer if you can get a 0% or a very low APR lifetime balance transfer.

If you post your APR's and outgoings we will be able to help.

Merlot.x.

poorandindenial

Hi there

You could put together an SOA (as albertross and merlot have described) and post it here and let people on this forum help you have more money to put towards the debt. It is also well worth doing a spending diary so that you think twice before spending money and can identify areas that you can make savings which will also free up cash to clear the debt.

It is also worth checking out the old style board to check out how you can make food budgets etc go much further.

Good luck getting it cleared and well done for sorting it before it gets bigger!

Good luck

antneal7

My monthly out goings are-
£187.11 Hire Purchase Car
£18 Savings
£30 Car Insurance (thanks to the insurance sweep on the main MSE site)
£38 Gym Membership
£25 Savings with HSBC
£20 Pension Payment
£200 Rent to Parents
£35 Phone Bill
£30-£50 Petrol
I dont pay any APR on my overdaft just get charged if go over it!
Credit Card 2's monthly interest rate is 1.313%

wydsiwyrg

Hi Ant,

From the limited SOA you've put up, here's my conclusions.

You get in each month: 835.76 (is that right?) after tax

You spend a total of: 603.11

If you throw the rest of the money at your debts, you should find yourself shot of them in no time.

However, I would advise the following on your SOA.

1) Don't save. Nor pension, till all your debts are paid off. In the long run you'll save yourself a LOT of grief.

2) Sell your HP car, and buy a cheap and cheerful motor. I bought a Volvo 340 last week for £250. It's fantastic, and has 11 months MOT. Even if I bought one of those every 6 months, I'd be saving a heck of a lot of money over buying a flashy car on HP.

3) Gym membership - cut it out for now. You're a young lad, maybe wait until you have a company backed scheme, or if you're looking to go to Uni you'll be able to get a student deal for cheap.

4) Cut the phone bill down.

Essentially you're in a GREAT position because you should have around £500 per month disposable income if you budget correctly; which means you can pay off your debt in a few months, then save for the future.

Hope this helps,
Tim

antneal7

one saving is locked in for the next 8 or 9 years i started it when i was very young and i do get a tidy sum paid out to as a lump sum.
the other is a savings with HSBC that saves me 7% roughly tied in for a year.

Merlot

Can you sell a car on HP?

Sorry, I thought I'd ask, cause I'm not sure of that answer.

Merlot.x.

antneal7

I cannot sell my HP car it has to go back after 3 years.
with pensions what happens to the money i have saved so far do i just lose that all??
Thanks for all your help guys

wydsiwyrg

Hi Ant;

Are you on a generic stakeholder pension plan? If so, you don't lose any money - but you can ask your employer to drop your payments (if they come off your paycheck); or agree to stop payments for a while with your pension provider. Some pensions providers have a minimum payment per month but that's usually around £10 rather than £20. In the long run, if you can drop to that, it'll probably help you - the money will stay in your pension, but just grow (or lose), on it's own rather than with the growth that you're giving it every month. In essence a pension is just a long term savings plan.

Tim