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  • FIRST POST
    honeybear
    Taking the first step...
    • #1
    • 18th Aug 09, 10:32 AM
    Taking the first step... 18th Aug 09 at 10:32 AM
    Ok, so here goes...

    I've been in & out (but not for long) of debt for years. Generally by random spending on cards then getting loans etc to pay it off but not having the sense to not do it all again. I'm probably in a better position with my debts now than I have been in the past but my total lack of money all the time is really getting me down. I need to address my spending habits, i think.

    Eek! Didn't mean to make this sound all so confessional & "Oprah" ish so here's my SOA:

    Monthly income = 2,500

    Monthly Expenses
    Rent = 1,170
    Council tax = 62
    Electricity = 31
    Gas = 31
    Water rates = 28
    Telephone (land line) = 25
    Mobile phone = 25
    TV Licence = 12
    Internet Services = 5
    Groceries etc = 250
    Clothing = 50
    Other travel = 100
    Medical (prescriptions, dentist etc) = 35
    Contents insurance = 20
    Presents (birthday, christmas etc) = 85
    Haircuts = 30
    Entertainment = 65
    Holiday = 70

    Total = 2,094
     
     
    Debts:
    Loan = 12,875.04 10.38% Fixed monthly payment 268
    Credit Card = 97.61 30.34% (100 credit limit, paid in full every month)
    Overdraft = 2900.00 12.9%

    I tend to always max my card in a month & I live in my overdraft so my monthly debt costs are approx: 395
Page 1
  • dannynixon
    • #2
    • 18th Aug 09, 10:56 AM
    • #2
    • 18th Aug 09, 10:56 AM
    Hi and well done for posting you SOA. Here is what I make of it. Not sure if you have family etc so I will take it you live on your own.

    Rent @ over 1000p/m?!?!? Could you downsize?
    Do you need a landline and a mobile?
    Could you drop your 250 a month shopping budget using the old style board for recipies etc?
    Other travel - is this a bus? Could you bike to your destination?
    Do you need a haircut every month or could you go every other? Could you get your hair cut by students at a college?
    Can you afford a holiday?



    How long do you have left on the loan?
    What are you spending 100 a month on the Visa for? Your SOA doesnt indicate this. Is it 100 worth of entertainment?
    LBM - 30/07/09
    Started DMP in Oct 2009, went wrong. Due to start new DMP in March/April 2013. Bring it on!

  • honeybear
    • #3
    • 18th Aug 09, 11:13 AM
    • #3
    • 18th Aug 09, 11:13 AM
    All very sensible questions, thank you

    I live in London, don't drive & do a job that I need to be on hand for at short notice a lot so need to be close to work. Would be trickier to live in anywhere much smaller than my place too! It is something I keep considering but am tied to the place for the time being.
    The landline also provides my internet, I've just split the costs. Am looking round for a new deal on it though. And not having my mobile would make my personal life (family & b/f) very very tricky
    I am looking at cutting back on other things, like food etc. The hair thing is split over a yearly cost, same as the holiday & the presents. Keep looking around for cheaper options but not with much success so far so I'm trying to hold off going as much as poss.
    As for travel, I think cycling in London is a death wish! I do walk a lot & try to use the bus more than the tube. Also have to travel to see b/f, which is costly when averaged over a year, even on cheap tickets.
    I use my card for rubbish sometimes, ie.treats etc. But it is also really handy in emergencies or when I have to stay away for work at short notice (happens a lot!). The bargain I have with myself is that I always clear it every month but I need to get into the habit of not using it "just because"
    Oh & the loan has 4 years to go
  • dannynixon
    • #4
    • 18th Aug 09, 11:22 AM
    • #4
    • 18th Aug 09, 11:22 AM
    Shame about the loan being so long.

    Sorry more questions,

    Could you b/f come and visit you?

    I think spending on the card for 'because' will have to be a no-no. Could you start a daily spending diary, writing down everything you spend so that you see exactly where the money is going?

    Are you tied to the landline? If not, get rid and pick up a mobile broadband dongle for 15 a month, this will give you an instant saving of 15.

    Could you cut back on clothing for a few months?

    Your SOA doesn't actually look that bad, it is just your rent. I can't believe it is that high! I thought mine was expensive @ 550 a month. How long are you tied to it?

    250 a month on food seems high for one. I seriously think you could reduce this. Do you buy lots of ready meals etc because they are v.expensive.


    The positive thing is you are (just) in the green and at least your creditors are being paid. Many people on here are in the red each month by a few hundred pounds.

    Have you shopped around (comparison sites) for your home insurance?

    Don't mean to sound negative with lots of questions
    LBM - 30/07/09
    Started DMP in Oct 2009, went wrong. Due to start new DMP in March/April 2013. Bring it on!

  • TMoose
    • #5
    • 18th Aug 09, 11:24 AM
    • #5
    • 18th Aug 09, 11:24 AM
    1170pm is alot pm even for London - I assume from that you are renting a one-bed on your own (and a fairly nice one at that!)

    Whilst I appreciate that it may not be ideal, you may want to consider a house-share. I have just moved out of a 3 bed semi in leafy zone 4 which I shared with a friend for 600pm each. I'm now living with my gf and a friend in zone 3 for 490pm... So if you are serious about hitting your debt, this is the way to go!

    Also, assuming you are living alone - 250pm is huge for groceries. I'm a foodie and still manage to keep under 200pm.

    Also, the holiday has to go - 70pm = 840per year - that 7% of your overall debt! Similarly cut back on the presents - that's another grand every year...

    I think that you've got plenty of room for maneuver and should be able to get yourself out of your overdraft and into the black (Which is always a nice sight) quite quickly!
  • honeybear
    • #6
    • 18th Aug 09, 11:37 AM
    • #6
    • 18th Aug 09, 11:37 AM
    Ooh, crikey, lots of questions!

    My place is nice & in a nice bit of a scummy area. When I moved here I didn't know anyone (still don't know many people) so having somewhere nice & safe was very important, and still is. I'm tied to it for another year but because it's nice & I do feel happy & safe here, that helps make the cost bearable. That being said, I am starting already to consider my options for the future.
    The comments about food, holidays etc are what I think I really need to help me get some perspective. I know in comparison to alot of people on here I'm in a good position. My trouble is not controlling my spending & not facing up to it, so all this is really helping.
    My food bills end up so high cos I drink far too much red wine Again, am now facing up to this too. I do generally cook from scratch but I intend to have a look at the old fashioned money saving stuff to get some extra tips
  • dannynixon
    • #7
    • 18th Aug 09, 11:44 AM
    • #7
    • 18th Aug 09, 11:44 AM
    Where do you do your food shopping? There may be some cheaper alternatives.

    Could the holiday not go?

    Other then rent, holiday, groceries, travel to bf and Visa I cannot see where you will cut back because you don't owe to loads of creditors
    LBM - 30/07/09
    Started DMP in Oct 2009, went wrong. Due to start new DMP in March/April 2013. Bring it on!

  • TMoose
    • #8
    • 18th Aug 09, 11:46 AM
    • #8
    • 18th Aug 09, 11:46 AM
    I can understand your choice with where to live - when I moved here 4yrs ago, I knew virtually no-one, but over time have made friends, and even gotten myself a relationship! Gumtree is a great place to find shared flats - with strangers admittedly, but then again, strangers are only friends that you haven't met yet You can afford to be picky, so don't worry about having to live in a shithole...

    As for the rest, as you say, it's the kick up the backside that's needed. I was exactly the same, and the LBM/Kick came when HBOS took away my 5K overdraft with 2 weeks notice. I'm now scheduled to be debt free by the end of the year. That's not to say I don't enjoy my life - I've got a two week holiday to Hawaii and have an active social life... but then I do share a flat... so it's all swings and roundabouts. Effectively, living alone will dictate the fact that you cannot have a holiday/see your bf as often/buy as many clothes...

    Budgetting is a tough, but important skill to learn. I moved out of home when I was 18, and only really learned to manage my money now, 12 years later!

    In the good news(!) you've caught it before it gets really out of hand, so keep focussed, and feel free to pop in here for support - they're a useful bunch here!
  • TMoose
    • #9
    • 18th Aug 09, 11:55 AM
    • #9
    • 18th Aug 09, 11:55 AM
    Also, do you use Oyster for your travel? Do you have a travel-card? Do you have the correct zones/PAYG for the journeys you make?

    I assume you are based in zone 1/2, which makes it more expensive to travel, but it's always worth working out exactly the best way to get the most from the system - usually a zonal card, but sometimes it's worth just having zone 2 (say) and PAYGing in Zone 1...
    • misspoppy
    • By misspoppy 18th Aug 09, 12:05 PM
    • 1,006 Posts
    • 614 Thanks
    misspoppy
    Hi

    Just one thing, with your rent so high are you sure your council tax is right its really cheap concidering your rent.
  • honeybear
    Yeah, Zone 2 & cos of the sometimes crazy working hours Oyster works out as the best option.

    I do really appreciate all the comments/questions/suggetions so thanks

    It's all helping me to get my head around what I need to do & I think my first steps has to be keeping a spending diary cos that will help with not using the Visa & identifying all my nasty shopping habits &, in turn, help me to find alternatives.

    I will also talk to b/f about travelling& all the holiday stuff
  • honeybear
    Hi

    Just one thing, with your rent so high are you sure your council tax is right its really cheap concidering your rent.
    Originally posted by misspoppy
    It's now on a yearly basis, rather than 10 months, which does make a difference to how it was a few months back.
  • dannynixon
    I presume you will also have single person discount so it maybe sounds about right!
    LBM - 30/07/09
    Started DMP in Oct 2009, went wrong. Due to start new DMP in March/April 2013. Bring it on!

  • honeybear
    Yep! Just me & lots of plants. Some of the herbs though, which I use in cooking plus the smell is so cheering
  • TMoose
    So without *really* trying, you could cut 50 from your groceries, 50 from your presents, clothes to a minimum - so that's another 50, no holiday - another 70... that's 220 pm without moving! That's over 2500 per year. Your overdraft effectively. Without trying!

    Now if you want to get serious...
  • dannynixon
    Well good luck, get your spending diary done and just look at what you spend over the next few weeks. Try and pay cash, not your visa (apart from work) and you will be able to physically see the money go down!
    LBM - 30/07/09
    Started DMP in Oct 2009, went wrong. Due to start new DMP in March/April 2013. Bring it on!

  • honeybear
    So without *really* trying, you could cut 50 from your groceries, 50 from your presents, clothes to a minimum - so that's another 50, no holiday - another 70... that's 220 pm without moving! That's over 2500 per year. Your overdraft effectively. Without trying!

    Now if you want to get serious...
    Originally posted by TMoose
    That's really quite staggering & quite scary to see it broken down like that!

    I think i've lived with debt to some degree or another for so long, the idea of even just being out of an overdraft is just mind-blowing

    Have unearthed a notebook I got as a Christmas present & it is now my spending diary. The first thing that will be going in it is milk as I've run out & I really can't manage without.

    Off to the shops, thanks again for all the support
    • euronorris
    • By euronorris 18th Aug 09, 12:58 PM
    • 10,040 Posts
    • 46,821 Thanks
    euronorris
    How close do you need to be to work? Have you looked at some of the towns just outside of London? Like Orpington, Bromley, Sidcup, Dartford etc in Kent and there are plenty more in Essex too.

    I know that from Orpington, you can get a fast train into London in 20 minutes and the monthly train cost is around 130 GBP. A one bed place in the area would be 600-700 pcm. Still not cheap, but would still save you at least 340GBP per month!

    Something to think about for the future (I understand you are tied in at the moment).
    November wins: 20p Quidco, Cadbury World Family Ticket
  • honeybear
    Been out & achievd only buying the 2 things I went out for - yay! Have also carefully written them down too!

    I know where you're coming from, Euronorris, but until I learn to drive it's not a viable option - which is even more expense! But it would pay off in the long-term so it's yet another thing to consider
  • TMoose
    The other thing to do is declutter... eBay clothes, stuff and things that you no longer use, need or want... Be ruthless - when I moved I got rid of two bin bags full of clothes I hadn't worn in 18 months, a suitcase full of books (my vice!) and various bits of consumer electronics that I didn't need/want - a little light that attaches to your laptop to illuminate the keyboard???

    eBaying stuff can be time consuming, and frustrating, but if you're patient it's a good little earner!

    BTW - I'm not patient, and Sue Ryder Care ended up with my stuff!
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