Any advice welcomed

Tamar7 · 20 October 2018 at 8:32AM

Hi, after many years of uni, low incomes and moving for work, I've found myself in the position where I have a great job, but a monster of a debt. I have a £22000 loan, a car I'm paying for, an over draft and some credit card debt..( I'm desperately trying to keep a handle on) I earn OK but have nothing to save after the monthly debt payments. I've reduced or got rid of anything extra to be paying, I'm on the lowest rent, cheapest to run car and reduced down food costs to minimum. I've worked very hard to turn my credit rating from the worst to excellent and trying to maintain that, but I'm now a 38 year old woman basically renting the cheapest room I could get, just working to pay debts and not able to move on. I'd like to be looking at a mortgage or at least renting on my own soon.. I just don't know how I can pay off my debt any quicker. I'm also doing a part time masters which may be stopping soon as its proving too expensive. I can't work outside my job as I tend to work 60 hours a week already, and as I'm management level don't get over time either. My family haven't any savings or money so I'm just stuck now working to pay my monthly payments and slowly accruing more debt in the process... 🙁

Browntoa · 20 October 2018 at 8:39AM

Have you looked at 0% balance transfer cards ?

Move as much debt over to that card and keep up the same level of payment as before to clear that 0% debt asap .

MrsSave · 20 October 2018 at 8:40AM

The first thing I'd do is fill in your soa (link below) and post it. Make sure it's formatted to MSE.

http://www.stoozing.com/calculator/soa.php

That will give a clear image of your income and outgoings which will make it a lot easier to give advice as to what's best.

Tamar7 · 20 October 2018 at 8:44AM

I have already been down the 0% BT route, it was useful for a while but then a cost came up and I consolidated my credit cards, hence the £22k loan

Tamar7 · 20 October 2018 at 9:05AM

MrsSave wrote: »

The first thing I'd do is fill in your soa and post it. Make sure it's formatted to MSE.

That will give a clear image of your income and outgoings which will make it a lot easier to give advice as to what's best.

Its not comprehensive but here it is..
Statement of Affairs and Personal Balance Sheet

Monthly Income Details[/b]
Monthly income after tax................ 1869
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1869

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 203
Rent.................................... 495
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 50
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 10
Mobile phone............................ 25
TV Licence.............................. 0
Satellite/Cable TV...................... 6.99
Internet Services....................... 0
Groceries etc. ......................... 80
Clothing................................ 50
Petrol/diesel........................... 80
Road tax................................ 10
Car Insurance........................... 29
Car maintenance (including MOT)......... 10
Car parking............................. 40
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 53
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 10
Haircuts................................ 10
Entertainment........................... 200
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1361.99

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

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 12000....(203)......0
Total secured & HP debts...... 12000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Unsecured loan.................22000.....376.......3.3
Creditcard.....................1400......35........15
Creditcard.....................25........5.........15
Overdraft......................600.......15........0
Total unsecured debts..........24025.....431.......-

Monthly Budget Summary
Total monthly income.................... 1,869
Expenses (including HP & secured debts). 1,361.99
Available for debt repayments........... 507.01
Monthly UNsecured debt repayments....... 431
Amount left after debt repayments....... 76.01

Personal Balance Sheet Summary
Total assets (things you own)........... 0
Total HP & Secured debt................. -12,000
Total Unsecured debt.................... -24,025
Net Assets.............................. -36,025

The entertainments bit is where I've put incidental costs like meetings over a coffee for work, visiting family etc. The rent I pay is partly covering bills.
Thanks for any advice you can give.

MovingForwards · 20 October 2018 at 9:20AM

Clothes I would seriously cut back on (allow a small budget for tights/smalls but keep an eye on your work gear and when it is becoming too threadbare pop to buy a couple of skirts one month, blouses the next etc assuming it is suit type gear you have to wear).

Entertainment chop that in half, if you have meetings first thing make a coffee at home and take it in a flask, tip it into a cup for the meeting, unless it is in a coffee shop then just buy a small straight cheap coffee. Work out how much you are spending a month in coffee shops and it all adds up).

Not sure where you food shop but we rotate between sainsburys, tesco and occassionally lidl, buy a lot of the 'basics' range and special offer fruit/veg from the big supermarkets. If you eat meat then portion it slightly smaller to make an extra meal out of it. Will save you a bit of extra cash.

Potentially you can trim back £1500 a year on your outgoings and make headway in your debts.

Lastly, vet bills etc. What have you got petwise and does it/they live with you?

Tamar7 · 20 October 2018 at 9:36AM

Yes I've been looking at the coffee and have started to use my own coffee rather than buying. Foodwise, I'm gluten free which is a pain, but do look for the basics, I tend to rotate through tesco, sainsbury and lidl as they're local. Occasionally waitrose.
I have two indoor cats living with me, both 8 year olds. The clothes suggestion sounds alot like what I currently do, it's difficult to say monthly sometimes as I do go months without buying clothes and then some months splurge because the weather's changed and I need a new coat or shoes etc...

sourcrates · 20 October 2018 at 9:40AM

Hi,

It’s always difficult giving financial advice to people who have a reasonable income, but have just overstretched themselves.

If you were on half what you currently earn, I would advise bankruptcy as a way out, but on your salary, any IPA would be quite high.

I would be amazed if all you spent on food was £80 a month, I could easily double some of the figures.

However, assuming all creditors stopped charging interest, and leaving the car out of it for now, @£400 a month, you could clear the unsecured debt within 5 years on a debt management plan.

The car you can either return/sell (depending on the type of agreement) and/or add the debt to the DMP.

It’s the loan that’s the problem, consolidation never works out well does it.

Any advice welcomed

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