A sad case and her light-bulb moment

TLWR

Hello all. Long-time lurker, first-time poster...

I spent my student years having too much fun with a group of friends who were much better off than me. I graduated with a mountain of debt. I spent eighteen months temping for pennies, and another eighteen months in London on a salary that I later worked out it wasn't actually possible for me to live on.

However. None of this would have been as disastrous as it is if it weren't for my congenital inability to deal with my money. I come from a family with a long history of financial !!!!lessness. My father's idiocy has forced my parents to spend their retirement in something pretty close to poverty. Well, not entirely his idiocy. I was in a similar situation to this about eighteen months ago: my mother bailed me out. And how have I repaid her? By starting myself back down the same path. Somehow the appalling irony of this has passed me by until this evening. But suddenly I'm determined to do something to get myself out of the debt trap once and for all.

So... my SOA:

Statement of Affairs and Personal Balance Sheet

Monthly Income Details
Monthly income after tax................ 1094
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1094

Monthly Expense Details
Mortgage................................ 0
Secured loan repayments................. 177
Rent.................................... 210
Management charge (leasehold flat)...... 70
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 0
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 782

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 0
Other assets............................ 0
Total Assets............................ 0

Secured Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Secured Debt.................. 0........(177)......0
Total secured debts........... 0.........-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Credit card - Virgin...........2777......50........20
Credit card - M&S..............1777......50........5.8
Credit card - HBOS.............344.......6.........15
Total unsecured debts..........4898......106.......-

Monthly Budget Summary
Total monthly income.................... 1,094
Expenses (including secured debts)....... 782
Available for debt repayments........... 312
Monthly UNsecured debt repayments....... 106
Surplus(deficit if negative)............ 206

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total Secured debt...................... -0
Total Unsecured debt.................... -4,898
Personal net worth...................... -4,898

Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission.

There's stories behind the debt which you may or may not wish to hear...

Oh, and the killer Embarrassing Fact? I work in finance...:whistle:

So, any advice? I am inclined simply to throw the surplus at first the Virgin card then the M&S one.

TLWR

Forgot to say - the SOA includes neither my £18,000 student loan (because that's never going to be foreclosed on me) or my £7,700 car loan (although it does include the payments) because somehow that doesn't bother me as much as the credit card debt, and also because it has fairly hefty early redemption penalties.

skintchick

Looking at your SOA you entertainment looks high - what do you spend £200 on each month? Also your budget looks unrealistic - do you really NEVER have you hair cut?

It doesn;t seem too bad unless I'm missing something? Just the 5k to pay off? In which case throw money at it and pay it off! You seem to have spare cash.

If you don;t actually have spare cash in real life then try a spending diary to see where it all goes.

MrsTinks

Ok... you have a car SO... insurance, tax, maintenance None of them are free!
You're gonna have to break down entertainment too...
Income... Is there anyway of looking for a second job or maybe looking for a better paid job? I don't know where in the country you're living but it seems pretty low to me for someone in finance with a degree? I could be wrong!

TLWR

Sorry - the other thing I forgot to say is that the £200 is for general spending. One thing I have got quite good at in the last year is not *using* my credit cards, and with a separate food budget I can usually manage £50 a week for general spending.

Clothes I tend only to buy when I get spare cash - I'm lucky enough to have a very generous mileage payment for my ridiculously high business mileage: it covers my fuel easily and generally leaves me some money over for saving up to spend on Silly Nice Things.

I haven't had a haircut for several months... this is probably not a good thing!

I think I do need to keep a spending diary, though.

Horace

£100 spent on groceries for a month for one person is a lot. I live on my own in a rented flat and my grocery bill for a month including non-grocery items comes to £50.

I would suggest that you look on oldstyle moneysaving board for hints and tips on shopping and cooking meals. Also make your own sandwiches and take them to work instead of going out each day to buy lunch.

As has been said before your entertainment budget is too high, the answer is to go out less or find other ways of having fun without spending money.

As for the credit cards see if you can shift the debt ot a 0% balance transfer card - check out the Credit Cards section of MSE for hints on the best one to go for.

Another way of helping you save money and cut down is to keep a spending diary, when you go shopping make a list and buy what you need not what you want (by want I mean stuff like magazines, sweets, chocolate etc). Shop in places like Lidl and Aldi for food. If you want to buy clothes don't shop in the big stores like Zara go into Primark where you can get up to the minute clothes at reasonable prices.

TLWR

MrsTine wrote: »

Ok... you have a car SO... insurance, tax, maintenance None of them are free!
You're gonna have to break down entertainment too...
Income... Is there anyway of looking for a second job or maybe looking for a better paid job? I don't know where in the country you're living but it seems pretty low to me for someone in finance with a degree? I could be wrong!

I should save up for tax and maintenance, shouldn't I? Insurance is all paid up at the moment, but renewal time is coming, and I'm going to have to go for the ridiculously high interest of paying in instalments.

My salary isn't ace at the moment (I changed career and am at the bottom of the ladder) but I'm guaranteed a payrise in September: don't know how much yet, but should be at least an extra £150 a month after tax.

TLWR

Thanks so much for the replies, guys. It's bed time for me now, but I'll post an amended SOA tomorrow with your comments taken on board.

R.

LilacPixie

£50 a week for general spends :eek:

MrsTinks

OK that would obviously help
Yes you need to budget in things like insurance and tax etc. I get milage allowance too and what I do is pay for all my fuel on one card (happens to be AMEX cashback...) and then tranfer my monthly expenses to that account when I get them - that means it tends to run in profit and I SHOULD have enough for tax and maintenance and insurance as the year goes by... That btw is why you GET such high milage allowance It's because you have to pay for the running costs of your car. Also if you use the car for work you should have it insured for business use too... cost me about £20 extra for the year I think it was.
When insurance time comes make sure you go through the best deals through Martins guide and then use Quidco for cashback...

Emmy_L

does the management charge cover your TV license and your water rates?
I'm just curious as you put nothing down for them at all?