And so it begins ... the ROG fan's journey to DFness

A question about : And so it begins ... the ROG fan's journey to DFness

I am fed-up with being in debt, and have decided to do something about it.

I have an Ј850 overdraft with my current bank, Lloyds-TSB (although I have just opened an overdraft-free account online with Alliance & Leicester).

I have Ј5,868.73 of an Egg loan to pay off (Ј207 a month at 6.73% interest) and I have an indeterminate (although I'll find that out when I'm sent my deferral forms in August) amount of Student Loan money to pay off also.

On Ј1,435 a month this shouldn't be too difficult, so why is it that I seem to be finding it so difficult?

Best answers:

• You need to post up a Statement of Affairs (everyhitng that comes in, and everyting that goes out), so we can all see if there's anywhere you're spending that could be cut down. Start a spending diary, and write down everything you spend - papers, a cup of coffee etc. That way you can see where it all goes.
• Going on this, I ought to have a balance each month of £552.33, but somehow that never happens and I end up at the limit of my overdraft!
  Right, my SOA:
  Monthly Incomings:
  Salary: £1,435.02
  Total: £1,435.04
  Monthly Outgoings:
  Rent: £318.76
  CT: £78.00
  Gas: £0 (quarterly bills, paid when they arrive)
  Elec.: £20 (meter)
  TV L.: £0 (paid yearly in June)
  Food: £120
  Travel: £53.80
  Loan: £207
  Phone: £11.70 (average)
  Tiscali: £15.99
  Tesco: £12.49
  Weight-Watchers Online: £6.95
  Medication 1, 2 & 3: £21* (every quarter)
  Medication 4: £7* (every month)
  Total: £882.69
  * I know the prescription charge is less than £7 per item, but it isn't by much and these figures are easier
  Debts:
  1 Egg Loan
  Balance: -£5,694.65
  APR %: 6.73
  Loan Ends: 02/10/09
  Payment: £207.00
  2 Lloyds-TSB Overdraft
  Limit: -£850.00
  Current bal.: -£350.00
  APR: 18.7
  3 Student Loan PLC Loan
  Balance: Unknown
  APR %: Unknown
  Loan Ends: N/A
  Payment: Currently Deferred (Deferral ends, I think, in August)
  EDIT: I have remembered 5 more things I regularly pay for which I left off the original SOA. I have adjusted the figures to account for these.
• First off, even if your bils are quartley etc, you still need to be putting away fro them, otherwise you have to find a lump sum when they're due, robbing peter to paul paul etc. We got our last util bills for a year (less heating in summer etc), and averaged them. Then we put this away ready for the bill.
  Have you started your spending diary? You may find that this is where it goes. Get out your bank statements for last mnth, mark off eveything you've accounted for and see what's left. Then try and track it down.
  What about a mobile? Don;t forget the top-ups if you have one. PLus haircuts, getting a paper, stopping at that cafe every day for a takeout coffee and a mars bar. How about going out?
• In the meantime, how about going through your house and ebaying/amazoning everything you no longer need to knock a lump off one of your bills. If you can get a 0% transfer deal, you can transfer your debt onto it and at least then 100% of your payments goes to your debt.
  If you can do that and put half the money you've 'left over' (assuming half the money you just forgot to account for) every month on top of your payments you'll be clear of the 2 loans in 11 months!! So not as bad as you might have thought.
• Hi
  Not great with these but will try -
  What is the £12.49 Tesco payment ??
  How many of you are there in the household ?? If it is just you then your food bill could come down a little (£20/£30).
  Also if it is just you have you applied to the Counsil for the single person allowance ??
  Do you really need the Weight Watchers On-Line - could this not go while you get sorted ??
  Hope this helps a little.
  T xx
• There you go then Do start your spending diary - just a little notebook that you put down EVERYTHING you spend cash on.
  Yeah, the libraries are getting a lot better. The one near my shop is always getting the new books in, and if you request will even buy them to order. And if you just have to buy them, try Amazon. You can usually get them a lot cheaper by buying them through the used option.
  The buying breakfast & lunch thing is going to be a hard one to crack. If you work i an office, is it worth buying some cereal or something to keep in your desk, and just taking some milk with you? If not, when you have an evening free try making some homemade breakfast bars. Healthier too usually! Packed lunches doesn't have to be boring, wraps, soups etc. I found it tricky at first, but I found the knack was getting most of it ready as soon as I got in through the door, and therfore still in a 'work' frame of mind (rather than half an hour later when you'e got your shoes off and a cuppa, and in a 'sod the world I'm not doing anything else' frame of mind)
  The weight wathchers thing could be scrapped, there's loads of free diet resources on the web, and I found joining a site like www.3fatchicks.com was just as good, and usually a lot better informed, as they weren't trying to push the WW branded food on you!
• As for being a hoarder, it really is psychologically a big boost to have a clearout. Especially now it's spring.
  Do it bit by bit, it's not such a big job then. 3 boxes - keep, sell and bin. Beleive me, you'll feel a lot better, and be a bit richer!!
• Phone your local council - that's what I did. The number will be on the net or on your last bill. Then just tell them you'd like to apply for single person discount. My council sent me a revised bill a few days later.
• Ok - so cancelling WW payment will give you an extra £83.40 per year
  Cutting down your shopping by £20.00 per month will save you £240.00 per year.
  Telephone your local Council Tax office and they will send you the forms you need to apply for the single persons allowance.
  Ahhhh we are getting there - lol
  T xx
• Unless I'm missing something, you seem to have a surplus of around £400 at the end of every month. I'm not really sure why you're worried?
• One more thing - you say you always end up at your overdraft limit - if you have ever gone over your overdraft you will have bank charges to claim back !!
  Get claiming if you have any !!
  T xx
• Do as OberonSH suggested and start a spending diary, I found that getting cash out of the bank was a sure fire way to let the money slip through my fingers. Now I have a record of exactly where that £50 I got out of the cash machine 2 weeks ago went (in my case £12 in back pocket money for DS, £10 for DH who had no cash of his own, £18 in Lidl, £7 in the farm shop and £3 still in my purse!).