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  • FIRST POST
    pete29
    My Lightbulb Moment
    • #1
    • 3rd Sep 11, 11:00 PM
    My Lightbulb Moment 3rd Sep 11 at 11:00 PM
    Hello! My name's Pete and this is my first post here, so apologies if it's in the wrong place.

    I guess you could say I've just had my lightbulb moment. I've always had debts on credit cards, but always dismissed them as I've felt I'd been managing them, even as they continue to grow. However, a couple of weeks ago (18th August to be precise) I went to the bank to get some money out to buy some lunch and I had insufficient funds. I'd gone over my overdraft limit and couldn't get any cash. This was the first time this had happened to me and it was a horrible place to be. That's when I realised I had to do something about it, and I wasn't managing my debts at all, just ignoring them.

    So tonight I sat and added up my debts and it doesn't make pretty reading! Currently I owe 15,712.05 across 2 overdrafts and 4 credit cards. Ouch!

    So it's time to stop ignoring them and do something about it. I will do a SOA/ budget tomorrow, but in the meantime I wanted to post to make a start! And any advice people can give will be warmly received!


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    Last edited by Former MSE Penelope; 13-09-2011 at 7:34 PM.
Page 1
  • topcat9
    • #2
    • 3rd Sep 11, 11:13 PM
    Welcome
    • #2
    • 3rd Sep 11, 11:13 PM
    Hi pete29,

    Just wanted to say welcome! You've made the first step to being debt-free by joining this forum and once you've posted your SOA you will get lots of useful advice from everyone.

    Best of luck.
    LBM August 2007
    Amount Owed 101,068.35
    Amount Owed March 2012 13,449.16
    DFD October 2013
  • Hovel lady
    • #3
    • 3rd Sep 11, 11:14 PM
    • #3
    • 3rd Sep 11, 11:14 PM
    Hi Pete and welcome

    Well done on your LBM.
    Yes, post your SOA and I'm sure we'll have suggestions to help.
  • BKAT_9
    • #4
    • 4th Sep 11, 12:08 AM
    • #4
    • 4th Sep 11, 12:08 AM
    Hi Pete - welcome!

    I am sure you can crack this, will need to have some determination but it will come right in the end, I was amazed at how much money I frittered away before I started really making an effort with it, now I get more enjoyment saving than I did spending! Lets face it - most of us can stand accused of having not much to show for the money we have spent at some point in their lives!

    Post your SOA and you will be access for a font of knowledge on here! I also think its just quite liberating to share! A problem shared is a problem halved!
  • muffins22
    • #5
    • 4th Sep 11, 2:12 AM
    • #5
    • 4th Sep 11, 2:12 AM
    Good luck!!

    I've recently had my lightbulb moment too, feels good to take the first step doesn't it?
    Oct 10 a day challenge 225.19/310
    Sept 10 a day challenge: 272.13/300
    Debt 1951.97/2154
  • pete29
    • #6
    • 4th Sep 11, 1:09 PM
    • #6
    • 4th Sep 11, 1:09 PM
    Thanks all! Feels good to make the first step, but also a little overwhelming!

    I have just completed my SOA and it doesn't look too good at the moment- my current shortfall is 323.17 per month. I definitely need to see where I can make some savings!

    Here is my current SOA:

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1875.2
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 125
    Total monthly income.................... 2000.2


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 74.2
    Rent.................................... 710
    Management charge (leasehold property).. 0
    Council tax............................. 84.43
    Electricity............................. 41
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 29.53
    Telephone (land line)................... 12.99
    Mobile phone............................ 29.9
    TV Licence.............................. 12.43
    Satellite/Cable TV...................... 6.5
    Internet Services....................... 13.5
    Groceries etc. ......................... 165
    Clothing................................ 20
    Petrol/diesel........................... 35
    Road tax................................ 13.75
    Car Insurance........................... 31.58
    Car maintenance (including MOT)......... 37.5
    Car parking............................. 0
    Other travel............................ 313.8
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 8.42
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 14
    Entertainment........................... 150
    Holiday................................. 50
    Emergency fund.......................... 0
    RBS Bank Charges........................ 12.95
    A+L Overdraft........................... 10
    Counselling............................. 195
    Total monthly expenses.................. 2081.48



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 1000
    Other assets............................ 0
    Total Assets............................ 1000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 742.1....(74.2).....0
    Total secured & HP debts...... 742.1.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    RBS Account....................1317.18...0.........17. 63
    Halifax Credit Card............1981.67...14.87.....15.9
    A+L Account....................952.4.....0.........0
    MBNA Card......................5571.19...129.4.....14.9
    Barclaycard....................3699.87...75.5..... .0
    Santander Credit Card..........2189.74...22.12.....0
    Unsecured debts..............15712.05
    Last edited by pete29; 04-09-2011 at 1:12 PM. Reason: Fixing formatting
    • curlytop12
    • By curlytop12 4th Sep 11, 1:27 PM
    • 1,094 Posts
    • 1,179 Thanks
    curlytop12
    • #7
    • 4th Sep 11, 1:27 PM
    • #7
    • 4th Sep 11, 1:27 PM
    hi,welcome.
    first thing that jumps out-rent!could you downsize/get a lodger temporarily?thats extortionate for one person!
    what is the HP for please?
    any room on your 0% CC's to shift some of other balances to?
    • tiny_courageous
    • By tiny_courageous 4th Sep 11, 1:30 PM
    • 1,255 Posts
    • 3,569 Thanks
    tiny_courageous
    • #8
    • 4th Sep 11, 1:30 PM
    • #8
    • 4th Sep 11, 1:30 PM
    Travel costs look high - is the car actually necessary?

    Well done on making a start.
  • deepoo
    • #9
    • 4th Sep 11, 1:54 PM
    • #9
    • 4th Sep 11, 1:54 PM
    Hi Pete, your doing the right thing by facing the problem head on. Your expenses and income are almost equal, so to tackle this you have to get serious. You must reduce your expenses and, if you can, increase your income. Then you can stop getting into more debt and start paying of those cards.

    Look at every thing you spend money on and see if you can reduce it in some way. Remember, never pay someone else to do something that you can do yourself cheaper, including food and drink.

    Try getting part time work - this has an extra benefit that you can't spend and work at the same time.

    With a little effort and care you can become debt free.
    • katsu
    • By katsu 4th Sep 11, 1:59 PM
    • 4,368 Posts
    • 13,707 Thanks
    katsu
    Thanks all! Feels good to make the first step, but also a little overwhelming!

    I have just completed my SOA and it doesn't look too good at the moment- my current shortfall is 323.17 per month. I definitely need to see where I can make some savings!

    Here is my current SOA:

    Statement of Affairs and Personal Balance Sheet

    Household Information

    Number of adults in household........... 1
    Number of children in household......... 0
    Number of cars owned.................... 1

    Monthly Income Details

    Monthly income after tax................ 1875.2
    Partners monthly income after tax....... 0
    Benefits................................ 0
    Other income............................ 125 Is this something you can increase to help reduce the shortfall?
    Total monthly income.................... 2000.2


    Monthly Expense Details

    Mortgage................................ 0
    Secured/HP loan repayments.............. 74.2
    Rent.................................... 710 that is lots - travel and your home are more than half your monthly income so are the best areas to look for savings. Can you reduce this by moving somewhere cheaper?
    Management charge (leasehold property).. 0
    Council tax............................. 84.43 getting single person discount?
    Electricity............................. 41
    Gas..................................... 0
    Oil..................................... 0
    Water rates............................. 29.53
    Telephone (land line)................... 12.99
    Mobile phone............................ 29.9 look at cutting this
    TV Licence.............................. 12.43
    Satellite/Cable TV...................... 6.5 low but get a freeview box instead
    Internet Services....................... 13.5
    Groceries etc. ......................... 165 look at OS board for tips on cutting this
    Clothing................................ 20 can you stop for a few months?
    Petrol/diesel........................... 35
    Road tax................................ 13.75
    Car Insurance........................... 31.58
    Car maintenance (including MOT)......... 37.5 are you saving this?
    Car parking............................. 0
    Other travel............................ 313.8 do you need this and a car?
    Childcare/nursery....................... 0
    Other child related expenses............ 0
    Medical (prescriptions, dentist etc).... 0
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 8.42
    Life assurance ......................... 0
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 10
    Haircuts................................ 14 look at a local FE college to get this cost down a little further
    Entertainment........................... 150 afraid this may be the thing you need to cut
    Holiday................................. 50 and this too
    Emergency fund.......................... 0
    RBS Bank Charges........................ 12.95 are you using the OD on this account? Any savings if you can get the RBS and A&L overdrafts together?
    A+L Overdraft........................... 10
    Counselling............................. 195 I assume this is important to you and so you'll need to make other painful changes to keep affording it.
    Total monthly expenses.................. 2081.48



    Assets

    Cash.................................... 0
    House value (Gross)..................... 0
    Shares and bonds........................ 0
    Car(s).................................. 1000
    Other assets............................ 0
    Total Assets............................ 1000



    Secured & HP Debts

    Description....................Debt......Monthly.. .APR
    Mortgage...................... 0........(0)........0
    Hire Purchase (HP) debt ...... 742.1....(74.2).....0
    Total secured & HP debts...... 742.1.....-.........-


    Unsecured Debts
    Description....................Debt......Monthly.. .APR
    RBS Account....................1317.18...0.........17. 63
    Halifax Credit Card............1981.67...14.87.....15.9
    A+L Account....................952.4.....0.........0
    MBNA Card......................5571.19...129.4.....14.9
    Barclaycard....................3699.87...75.5..... .0
    Santander Credit Card..........2189.74...22.12.....0
    Unsecured debts..............15712.05
    Originally posted by pete29
    Some thoughts above - good luck in making this work.
    Debt at highest - 8k Debt Free 31/12/2009 (eight years and counting )
    Original MFD: May 2036 Current MFD: 2021
  • pete29
    Wow! I go away for an hour or so and already a lot of responses. Thank you all for the ideas, I'm very grateful.

    Firstly, I agree with the rent/ travel costs. I live in Surrey and work in London, so the combined cost of rent and travel is 1023.80, before any council tax/bills. I definitely think this combined amount can be reduced. Currently, I live by myself (1 bedroom flat), and ideally would not like to go back to flat sharing. However, I'm now on a rolling month by month contract, so this would jump out as the first potential area of savings.

    @gem68 HP is for furniture I purchased last year- due to be paid off May 2012.
    I will look this afternoon at my credit cards, and see if there is any possibility of moving debts to 0% CC.

    @tiny_courageous I think the car is probably unnecessary now. I started a new job earlier this year and went from using the car every day, to using train/ tube (hence the 313.80 a month travelcard). I've been holding on to it for convenience, but the cold hard numbers don't add up.

    @deepoo thanks for the advice. Going for a promotion at work, so hopefully if that comes off, that will increase my income.

    @katsu
    Hopefully my monthly income will be going up, but will find out this week.
    Will look at rent and travel, and see if I can bring down the overall cost. Not sure if it will be possible to bring down just rent, but will look at the options.
    Yes I'm getting the single person discount.
    Mobile phone/ Line rental. Probably don't need 2 phones, so this may be an area of saving.
    Cable TV. Have had issues with reception in the past and my freeview box struggled, but perhaps if I move to a new area, this can go.
    Groceries/ clothes. Will look at ways to cut these down and get some advice from the board.
    As mentioned above, no I don't need a car now, so that may have to go.
    Yes, I'm using the OD on the RBS account, hence why I'm keeping it. Will look at combining the 2 to see if I can make any savings. I'm not sure if either will allow me an overdraft that large. But guess you don't know until you ask!
    The counselling is a tricky one. I started it a couple of years ago after having a breakdown/ struggling with depression. It does help, but is one of my major financial drains. Perhaps, there may be a way to cut back without affecting too much.


    Thanks again for all your suggestions, I really do appreciate it.
  • BKAT_9
    Hi Pete, I had counselling a few years ago when I was going through a really bad time, I was referred through my GP and the sessions were free. However I have a friend that is having counselling now and has to pay for it all privately, I am not sure of the specifics of how it all got sorted out with my GP - they basically just arranged it all for me and I was seeing someone within the week. So maybe worth talking to your GP?

    I know the feeling about not wishing to go back to flat share. My friend rented a 2 bedroom place and sub-letted the second bedroom to an acquaintance, I guess it was a bit safer as he did know the person. However this meant that although they were sharing my friend maintained some control, I know this sounds awful but I think it just made it an easir transition for him. Obviously you would need to check the agreement to make sure you werent doing anything illegal!
  • sparklystar
    I would agree with BKAT that it is definately worth seeing if your GP can refer you for counselling from the NHS. Alternatively it might be worth considering whether you could manage with fewer sessions a month? Maybe discuss with your counsellor and see what they think. all the best.

    • orangesmartie
    • By orangesmartie 4th Sep 11, 10:03 PM
    • 329 Posts
    • 831 Thanks
    orangesmartie
    With regard to counselling, most companies have some kind of 'employee assistance scheme' where you can ring up and be referrewd for counselling. It doesn't cost anything and they are bound by confidentiality not to give your name to your employers- the return just states how many people have used the service. I've used my EAP twice for counselling services.
  • pete29
    Thanks all for the advice re Counselling. Definitely some options to explore there, as it does cost a lot at the moment!
    • sickasachip13
    • By sickasachip13 4th Sep 11, 11:33 PM
    • 1,175 Posts
    • 1,511 Thanks
    sickasachip13
    Hey Pete

    Hi and welcome. Well done on your LBM mine didn't come until I'd dug a much bigger hole of debt than yours, so good work :-)

    On the counselling - could you get continued support through the NHS or some form of voluntary support / self-help group? I don't wish to sound callous or ill-informed, and please don't take this the wrong way as it's based on personal experience and knowledge of another friend who continued paying for counselling for years after it wasn't really needed anymore, but do you really need to continue counselling? It may be worth considering beginning to tail off the paid-for service?

    Anyhow, best of luck and welcome.

    SAAC13
    • Learning2Budget
    • By Learning2Budget 5th Sep 11, 8:18 AM
    • 1,094 Posts
    • 4,937 Thanks
    Learning2Budget
    Congratulations on your lbm, you will get lots of support on here! The only other thing i would suggest is keeping a spending diary, sometimes it's the little things that you fritter your money on that could be the biggest savings!
    Good luck Pete, L2B.xx
    LBM 2008 45,091.23 eek: now 7889 Debt free date 18/07/2018
  • pete29
    sickasachip, you don't sound callous at all and I appreciate the support! It's something I have been thinking about- think I may need to have a chat with my councillor this week!

    learning2budget. definitely a good idea. It was something I did for a while, so time to get back to it I think and see where the smaller amounts are leaking out :-)
    • sharronej
    • By sharronej 5th Sep 11, 10:59 PM
    • 563 Posts
    • 4,784 Thanks
    sharronej
    Hi Pete,

    I had counselling a couple for years ago on the NHS - it was very enlightening and helped me hugely so I fully understand why you pay for this. I was allowed a total of 13 sessions either weekly, I found that fortnightly or even monthly worked better for me - gave me more time to consider what had been discussed and think about how I wanted to move forward (I'm sure you know the score) anyway the point I wanted to make is that the I was nervous about finishing the sessions (they were such a relief to me) but the counsellor said that you could continue in counselling forever and a day but that's not what it's designed for. Do you feel that you've reached the point where actually it's a way to let off steam rather than actually progressing to the point of 'closure' or whatever it's aim is? How much is it per hour? Could you perhaps half the number of hours in a month?

    Do discuss it though because there's no point risking your mental health especially at a time where you've had your LBM.

    Good luck
    • Soundgirlrocks
    • By Soundgirlrocks 5th Sep 11, 11:40 PM
    • 554 Posts
    • 832 Thanks
    Soundgirlrocks
    Hi just a thought but could you look at moving closer to work and cycling? rents in zone 4 would probably be roughy the same as you pay now but you would drastically reduce your travel cost plus get some exercise instead of still on the tube and you might even find it's quicker! - not that I'm a cycle convert or anything
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