Advice and support - new DFW

meema

This is one of my first posts on this site although I joined a couple of years ago. I've had quite a few 'lightbulb moments' over the years but this is the biggest one yet and hopefully it's not gonna be switched off any time soon!

I think there are a few things which are motivating me to change, not least of which is the sheer amount of debt I'm in (nearly 29K). But also I've gradually been changing my outlook on life. Although I don't have holidays, designer clothes, or a car, I have always lived well outside my means on the day to day things. I think this was because I felt entitled to treat myself to new outfits, good food, music, concerts, nights outs etc. I'm starting to realise there is no shame in not being able to keep up with friends and colleagues with regards to these things and anyway, the stress of debt is outweighing the fun I get from spending on stuff like that. I think my generation is really encouraged to spend, and the bar of what constitutes a 'normal' lifestyle has really been raised. Is that controversial? I'd be interested to hear other people's thoughts on that.

One of the biggest motivators to really get to grips with my debt is that after years of studying, I am finally going to qualify as a psychologist this year. This will mean a pay rise and also a reduction in living expenses as I can move out of London. Last year I considered bankruptcy and IVA's but decided to try to go as long as possible without doing either as I thought if it's possible I really want to pay back what I owe. I think at 29 I'm only just beginning to understand the value of money.

So, I will (not so) proudly present my SOA:

Debt

Name Amount APR
Student Loans £8364 4.8%
Natwest graduate loan £9293 7.9%
Lloyds TSB credit card £6869 26%
Natwest overdraft £2000 0% - May 08, then 17%
Smile overdraft £2000 0% - May 09, then 9.9%

Total £28526

Current debt free date – July 2013

I have started to make some changes to this (thanks to this website) I have managed to arrange two 0% balance transfers to reduce the amount on my Lloyds credit card. My wonderful mum has also agreed to take out a loan on my behalf (I got refused a loan from several companies and offered 23% APR from another) to pay off the remaining balance on Lloyds card. So, hopefully that should bring my debt free date a bit closer.

Budget

bills and travel
Rent £480
Council tax £70
Gas/Elec £23
Water £16
TV licence £5.50
Internet/home phone £15
Travel (london) £100
Travel (outside) £25
Mobile phone £35
food shopping £100
total bills and travel £869.50

Debt repayments
Student loans £140
Lloyds credit card £150
Natwest loan £271
Smile overdraft £5
Natwest overdraft £5
Total debt repayments £571


Total essentials £1440.50
Monthly salary £1659.00

Left over £219


However! I can assure you there is never any money left in my bank at the end of the month so now I am trying to keeping a spending diary and trying to keep track of where it goes. I kept a diary last month but it was rather unusual as I had to go to Scotland 3 times in 6 weeks for job interviews and a wedding (though I had paid for fares in advance previous month).

Feb '08 after essentials I spent:

Socialising (inc wedding in scotland with b&b and friends b'day) £94
Clothes and drycleaning (for interview and work) £70
Clothes (non work) £15
Accessories (bag) £40
Haircut £22
Hairdye £4
Birthday presents and cards (4ppl) £30
Postage (things i sold on ebay) £20
Owed flatmate £15
Books (not for uni) £13
stationary for card making £14
lunch at work £6
misc (batteries, cafetier,toothbrush etc) £12

Total £355


So! Clearly there is work to be done! I very nearly didn't 'fess up to the leather bag at £40, but that'd be cheating. Although the total is over what I'd usually have available, I had some extra money from ebay that month. I've cut up my credit card so I can't spend on that even if I wanted to!!!

Sorry this has been such a long post but preparing to write this all up has helped me so much already. What I need help with now is keeping the motivation to keep track of what I'm spending and not bury my head in the sand again. It's very exposing writing all this down, I almost didn't post it but...will just take a deep breath and go for it.

All thoughts, comments and advice would be greatly appreciated. Thank you!

andan

Heya and glad to see you've had your lightbulb moment. I'm not great at giving advice but wanted to say hi and good luck.

Looking at your SOA i think there are a few things you could improve, such as looking at a cheaper mobile tarrif and possibly cutting down on your food bill, especially if this is for one person. There are lots of ways to save money on food over on the old style board. It's also important to cut down on some non essentials such as clothes and the £40 accessories!

Also if you can't cut down too much, try making more! Join some of the challeges to keep up the motivation and ways you can make more money. Look into things such as mystery shopping, free online bingo, matched betting(takes time to get your head round it though).

Really wish you the best of luck and it sounds like you've got some good ideas, especially dealing with that Lloyds card.

andan

In answer to your question re normal lifestyle, i completely agree that our generation (i'm twenty four) and the more recent generations are given an image of a lifestyle that is harder and harder to achieve. Only recently i saw on the telly regarding how your uncool in schools if you don't have the latest ipod. Scary really, especially as so many people aspire to this kind of lifestyle. My sister recently stopped me to tell me she had bought a diesel belt for £40, she was very impressed, more with the fact it was designer and had cost lots of money. I was horrified, she wasn't impressed when i told her she could have cost it online at a labels for less website i know, for only £16, it seemed to loose its appeal then!

ltm07

Hi,well done for posting. The mobile phone bill seems a bit high. OH & I switched from Vodafone to T-Mobile last year & our bills are very rarely more than £20 a month. Good luck & i'm sure there will be many more people who can give you advice. Good luck

Little_Miss_Shopaholic

Hello I just wanted to say good luck.

I'm sure someone will be along soon to give you some good advice, I'm still tyring to get my head around that but I can give you support.

I am 30 and only just beginning to understand the value of money. I fully understand what you are saying about feeling encouraged to spend. I fully accept that it is my fault I am in debt but I too have been leaving beyond my means for a long time now, my life changed when I split up with my boyfriend and had to move out of our house but my spending pattern never changed! I also felt like I needed to keep up with my friends who earn far more money than I do.

Anyway good luck, keep reading this site there are some great tips on here. Try having more than one no spend day a week, I feel great when I can get to the end of the day and think I haven't spent anything. I have not managed more than 3 in a row yet though!

cantcope

Hi, and welcome to the board. Well done for posting. I'm sure there are plenty of ways you can still have treats without spending. I'm 32 and missed these things massively to start with
I joined pigsback and used the vouchers to buy toiletries (with an occasional bubble bath) or if i had enough for a few months i swapped for arcadia vouchers and used them in top shop for new clothes.
I also saved my vouchers from tesco clubcard to get myself annual magazine subscriptions.
The little things kept me going when i couldnt afford to treat myself.

you can also swap them for Johnsons vouchers which would be handy as you are spending a lot on dry cleaning.

Good luck x

meema

andan wrote: »

Heya and glad to see you've had your lightbulb moment. I'm not great at giving advice but wanted to say hi and good luck.

Looking at your SOA i think there are a few things you could improve, such as looking at a cheaper mobile tarrif and possibly cutting down on your food bill, especially if this is for one person. It's also important to cut down on some non essentials such as clothes and the £40 accessories!

Hi and thanks for getting back to me. You're right about the mobile phone tarrif, I've started a new one so the bill will be different next month - £20 per month (with unlimited landline calls, 1000 texts, 600 minutes, plus a free phone which I'm going to sell on ebay). Also..very true about the accessories, I'm hoping to really cut back/cut out these things. This is where I will definately need encouragement

I don't know about cutting back the food bill, it is only for one person but I include my packed lunches for work and any meals out get taken off the food bill. I like the idea of taking up a challenge so maybe I'll try one of the food ones next month.

Thanks again for being the first to welcome me and all the advice!

Cleosmum

Are you sharing the TV licence with someone else? £5.50 is very low per month, its usually around £11.61 for a month.

I know what you mean about raising the bar. My brother has just passed his driving test and his first thought was where could he get the car of his dreams on finance. He was really annoyed at suggestions that he should get a cheap runaround with the £500 he had sat in the bank and that he could save the money in a high interest and go out and buy something he really wants in a years time. He sulked for about 4 hours and then turned up in a little runaround he bought off his mate - for £500 Now I just need to get through to him that he doesnt need to blow his wages on crap every month and get him to pay it into a savings account and actually leave it there! I might do some calcs and show him how much that £500-£700 a month would be at the end of the year....

meema

Little_Miss_Shopaholic wrote: »

Try having more than one no spend day a week, I feel great when I can get to the end of the day and think I haven't spent anything. I have not managed more than 3 in a row yet though!

Good idea! If you pay a bill that day but nothing else is it still a no spend day?

meema

Cleosmum wrote: »

Are you sharing the TV licence with someone else?

He sulked for about 4 hours and then turned up in a little runaround he bought off his mate - for £500

Hi Cleosmum, yes..all the utilities you see on my SOA are my share only and I live with one flatmate. My rent is 8 times more expensive than it was in Glasgow before I moved to london to study!! Eek! I love London but it really loves my money.

Well done on helping your brother out, he's very lucky to have such a sister!!:T

meema

cantcope wrote: »

I'm sure there are plenty of ways you can still have treats without spending. I'm 32 and missed these things massively to start with I joined pigsback and used the vouchers to buy toiletries (with an occasional bubble bath) or if i had enough for a few months i swapped for arcadia vouchers and used them in top shop for new clothes.
I also saved my vouchers from tesco clubcard to get myself annual magazine subscriptions.
The little things kept me going when i couldnt afford to treat myself.

you can also swap them for Johnsons vouchers which would be handy as you are spending a lot on dry cleaning.

Good luck x

Hi, thanks for your support I joined pigsback last night (after finding out about it on this site) and am trying to decide whether I should keep the vouchers for xmas shopping (I have tonnes of siblings) or use them as birthday gifts (lots of my friends are turning 30 this year).

I've just applied for a clubcard plus account from tesco - but think I will spend clubcard points on wineclub as they have a double up offer starting. I've just cancelled my magazine subscription to marie claire as I am becomming increasing irritated by the fact that it's about 75% adverts (even the 'features' advertise products). I can't even relax reading these magazines as I find them infuriating now, I used to love them.

Thanks again!