# Mid 20s, lots of debt, living at home



## PaddyPaddy (6 Oct 2009)

Age: *Mid 20s*
Spouse’s/Partner's age: *n/a*

Annual gross income from employment or profession:* 27k*
Annual gross income of spouse: *n/a*

Type of employment:* employed*

In general are you:
(a) spending more than you earn, or *** this one ***
(b) saving?

Rough estimate of value of home *n/a*
Amount outstanding on your mortgage: *n/a*
What interest rate are you paying? *n/a*

Other borrowings – car loans/personal loans etc
*Personal loan 1 - 150
Personal loan 2 - 2500
Personal loan 3 - 3500*

Do you pay off your full credit card balance each month? no
If not, what is the balance on your credit card?
*Credit Card 1 - 1900
Credit Card 2 - 2400
Credit Card 3 - 4900*

Savings and investments:
*Online Savings - 800
CU Savings - 1500*

Do you have a pension scheme? *no*

Do you own any investment or other property?* no, living at home*

Ages of children:* n/a*

Life insurance: *no*


What specific question do you have or what issues are of concern to you? 
*Lots of debt, low enough income, best way to deal with it*

*Monthly outgoings:*
Car Insurance - 70
Loan 1 - 105
eFlow - 20
Credit Card 1 - 50
Broadband - 15
Savings 1 - 200
Sky - 30
Loan 2 - 80
Loan 3 - 130
Savings 2 - 100
Credit Card 2 - 100
Phone credit - 25
Petrol - 50
Household contrib - 250
Credit Card 3 - 90


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## niceoneted (6 Oct 2009)

Looks like you will have one less loan before to long. 
No point in having savings or trying to save when you are trying to clear the debts. Use the savings to pay off some of the loans - they are possibly tied up as CU shares so you might clarify that. (Clear credit card 1 and 400 off credit card 2) 
Second thing to do is try to change to a 0% credit card. Try to move at least credit card 3 and if you can put one of the others or both with it great. then cut up the cards. 
Is there a possibility that your parents might let you off paying the 250 contribution for 6 months. 
Do you have to use the toll bridge? Do you really need sky? Or at least cut back to the basis saving about 6 euro a month.


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## PaddyPaddy (6 Oct 2009)

CU Savings - a normal CU shares account I can take money out of any time I like.
Online savings - one of those online saver accounts, again I can withdraw whenever I like.

Given the current state of the job market and what not I'd be happier to keep my 1500 as a rainy day fund. It's almost a months pay should the sh!t hit the fan.

The online savings is money I've been putting aside each month since last December. Hoping to use it for the various Xmas expenses and what not so hoped not to touch that.

The 200 a month to the CU savings is probably something I could reduce. Perhaps I should reduce it to 100 and put an extra 100 off a CC each month?

It's good that one of the loans will be gone next month, that'll be an extra 130 a month freed up for me.

I've applied for other credit cards and been declined for a 0% card isn't an option for me.

The credit cards have been cut up for about 2 months now.

Good suggestion about the household contrib but I'd really rather not. That is 1500 over 6 months and I'm sure they could do with it as well as they provide food, washing and what not.

The 20 euro is a rough estimate for the eflow. I don't use it that much lately as I've been trying to cut back on it. It's not essential for work.

As for Sky that's my contribution toward it that's in the house. The 30/month for it means that I have something to do on a Friday/ Saturday night rather than going out. I've been to the pub once in the last 3 months so I think the 30/month is a saving for me more than anything.

Please keep the feedback coming and feel free to argue back on my responses.


I should probably add that I've recently setup a second bank account and setup a SO every week into it for 75. This is money I'm allowing myself to spend on lunches, cinema, whatever. I'm thinking this may be too much but I dropped it down from the 100 I started with about a month ago and I need to do this in stages.


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## shoppergal (6 Oct 2009)

PaddyPaddy said:


> I should probably add that I've recently setup a second bank account and setup a SO every week into it for 75. This is money I'm allowing myself to spend on lunches, cinema, whatever. I'm thinking this may be too much but I dropped it down from the 100 I started with about a month ago and I need to do this in stages.


 
If you're serious about paying off your debts you need to seriously re-think this. At the rate you're paying off your credit cards it's gonna take a long time, you need to find ways of putting extra cash at it. 300 quid a month on "stuff" is a luxury you can't afford. make your lunches at home, skip the cinema and watch something on the sky you're paying for and thrown most of that 300 at your debts.

You also need to look at what's led you to build up that amount of debt in the first place. Have you anything you could sell to make back some of the money?


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## PaddyPaddy (6 Oct 2009)

You make a valid point about the 300. Very valid point. 300/month is an awful lot all things considered. I need to start somewhere though and it's a massive improvement over the previous. Will have to review that and see what I would even need to spend the 75/week on. I guess it might be better to justify the expenses rather than a bulk "spend this on anything" amount.

The debt has built up over the last few years on various holidays and trips I've been on. I've been living up life and now I'm looking to steady out the finances. My job used to also provide a monthly bonus anywhere between 300 - 1500 a month but this has dried up the last couple of months which is why this has probably all come to a head.


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## j26 (6 Oct 2009)

Your total debt (discounting the first one) is 15,200

Your current loan repayments are 655, plus a savings contribution of 200 per month, which means you have the ability to pay up to 855 a month off your loans without affecting anything else.

Have you considered a single term loan to cover all of the loans stretched over a longer period? I just had a quick look at the AIB website, for example and a loan of 15200 would be 690(ish) over 2 years, 480 over 3, and 370 over 4.  Since you have a decent record building up savings with the credit union, you might consider going with them, and you could continue to make the 855 payment (or thereabouts), with part going to paying the loan and part going to building up more shares.  Then you would then have shares built up for the future, and not have to start from scratch again when you dig yourself out of the debt you have. 

I wouldn't be inclined to cut back on your discretionary amount too far.  €300 pm doesn't seem excessive to me, when you consider that you are working and need some recreation.

On expenses, 


Shop around for your car insurance
Have a look at the Sky packages you have subscribed to, and see if you can save a couple of quid a month by getting rid of the ones you never use
Have a look at your phone plan and see if you could do better on a different tarriff/provider.
Start looking at annual expenses, and plan for them.  For example, I noticed that you didn't include an amount for car tax or maintenance, which will need to be paid.  If you haven't provided for that in your budget, you may find yourself short, and become tempted to use the credit cards to get yourself out of a tight spot, which is the start of a slippery slope.


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## PaddyPaddy (6 Oct 2009)

The credit union refused to give me a loan about 6 months ago. I've tried almost anywhere I can to get one big loan to put everything together but I've been declined for them all. Last and finally I tried my own bank last week and I've been refused.

* I shopped around for my car insurance. I'm on the cheapest one I could find. It's due for renewal next month and I'll be shopping around again then.
* Sky is a shared cost with the family. Everyone has a TV in their room. My share is only 30 and the packages are the same throughout the house. I save nothing by trying to get rid of packages in my room and not on the main TV downstairs as it's the same price.
* On my mobile I spend pretty much 20 / month for the free texts deal. I'm an insane texter (trying to cut down) but the 20 deal is saving me money. Was on billpay until about 2 months ago costing about 60 / month.
* Annual expenses ... I've got nothing there for the car which is true. I didn't consider that and sorta just pay those things as they come and worry about it after.

I take your comments on board about the 300 / month as well. While not excessive I think the other poster does have a point maybe. At a minimum I should probably look to include things like petrol / phone credit in the 300 / month if it's to happen.

Please keep it coming !


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## niceoneted (7 Oct 2009)

Seeing as you couldn't get a loan to consolidate and cover all your existing loans would you try to get a consolidation loan from the credit union for the two larger credit cards - 7,300, see maybe will they give you this or even up to 8k and pay 700 of credit card 1. 
Also I get that you want to contribute at home but could you perhaps get away with 100/150 for the next 6 months. That would surely cover the essentials.


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## Bronte (7 Oct 2009)

You asked for feedback.

I don't think you should consolidate.  You owe more than half your annual salary even while living at home.  A young person like you with 3 loans and 3 credit cards needs to learn how to properly deal with finances.  There is no justification in having that amount of different debt.  Also it's pure madness to save for xmas with your level of debt, skip xmas until your finances are in order.  Forget all discretionary spending for now.  The only savings you should make currently are into an account for annual bills such as car taxation.   A few months of hardship should get you back on track and if you can't manage credit cards then don't have them.  Best of luck.


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## spursman (7 Oct 2009)

you need 800 euro for xmas presents???? its that kind of thinking that has gotten you where you are me things


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## annR (7 Oct 2009)

Spursman, you beat me to it.

>>The online savings is money I've been putting aside each month since last December. Hoping to use it for the various Xmas expenses and what not so hoped not to touch that.<<

To be blunt - you cannot afford this.  Is this the 100 per month in your first post?  You are paying a fortune in credit card interest and you are putting away 100 per month for Christmas?    Are you one of these people who has to buy really expensive Christmas presents?  If so you have to consider just telling everything that this year is not the year for that - no shame in it, my brothers do it all the time.  Every year one or the other of them just opts out and that's fine.


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## Macstuff (7 Oct 2009)

I've two observations to make... 
1) You mentioned that you applied for a consolodation loan a few months back but were refused. It might be worth retrying that option a few month from now, the banks appear to be over the worst of the credit crisis and so might look at your application a bit more favourably then. 
I know of some people who were refused term loans when they applied at the beginning of this year, but who can now get them.

2) Only go for a consolodation loan if you are SURE that you are more responsible about money than you were in the past. 
From reading your posts, I'm still not convinced you are fully aware of how you got yourself into this debt, i.e. thru spending more than you earn. Your idea of spending so much on Christmas presents this year is nuts - YOU CANT AFFORD THAT.
I too have built up alot of debt over the past few years, but am now actively trying to reduce it, last year I spent about €125 on Christmas presents, compared to a normal X-Mas spend of €500... and do you know what no-one was disappointed with what they got. 

If you go for a consolodiation loan, but continue to overspend you are only going to get yourself into a deeper problem. 
Be honest with yourself and face up to the problem and you will get thru this. 

Best of luck with it


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## PaddyPaddy (7 Oct 2009)

Sorry, the 800 quid isn't all for Xmas presents. I guess that was just me putting in a reason to justify it. From my point of view it's more of a fund for unexpected expenses and what not. You know, sorta one off things or whatever. I guess maybe I don't need this when I have CU as well? I'm trying to think the online savings are more short term and the CU is more long term.

There's no dispute from me that the finances are a complete mess. I'm gonna have to sit down and do up an excel spreadsheet on all of this.

The online savings of 800 is the 100 / month.

I have no choice on the 250 / month to the household.


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## yram (9 Oct 2009)

Hi,

My opinion is that you should indeed keep saving while also paying off your debt. In a month or so, from what I gather (Loan 1 paid off), you will have €105 more to throw at another credit card/loan.
You should then throw this money at the loan/credit card with the highest interest rate.

With regards your savings, leave what you have in your 2 savings account there at the moment. Do not touch for unnecessary things-you are in no position to be buying a car if you can manage without one which you seem to be.

As I said I think you need to keep saving because it shows banks that you are serious while also possibly paving a way, in the future, to consolidate the last of your big loans.

I think you should be putting €200 savings per month in to one of these accounts. Thats 2400 a year, plus what you have already.

Then throw the €100 you are now not saving on with the €105 and you are now paying €205 off another big loan/credit card on top of what you are already paying....then when that one is paid off you take your 205 and what ever was the repayment for the last loan (for example loan 3 €130) and now youve €335 to pay off another credit card/loan.

If you go like this, you still have savings while also repaying debt.

A-you need to do a weekly breakdown of your spendings (monthly budgets for people in debt/trying to manage money I find is too ambitious).
B-I reckon it will take you at least 1 year to get out of the serious debt, but it is totally doable provided you dont go mad one day and spend your money on something crazy.


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## PaddyPaddy (10 Oct 2009)

My opinion is that you should indeed keep saving while also paying off your debt. In a month or so, from what I gather (Loan 1 paid off), you will have €105 more to throw at another credit card/loan.
You should then throw this money at the loan/credit card with the highest interest rate.
>> What's your basis for suggesting I save while paying off debt?
>> I'll try find out which one has the highest interest rate, I should really know that
>> I'll have approx 130 / month left as that's what the loan that's about to clear is costing monthly


With regards your savings, leave what you have in your 2 savings account there at the moment. Do not touch for unnecessary things-you are in no position to be buying a car if you can manage without one which you seem to be
>> I didn't mention buying a car did I? I'm not buying one. I have one (a banger, so no downgrade possible)

As I said I think you need to keep saving because it shows banks that you are serious while also possibly paving a way, in the future, to consolidate the last of your big loans.
>> Ok, fair point there. But will the banks really weigh that up against the loans or just look at it as a stupid move when I could be paying off loans?

I think you should be putting €200 savings per month in to one of these accounts. Thats 2400 a year, plus what you have already.
>> Sorry, what account? 

Then throw the €100 you are now not saving on with the €105 and you are now paying €205 off another big loan/credit card on top of what you are already paying....then when that one is paid off you take your 205 and what ever was the repayment for the last loan (for example loan 3 €130) and now youve €335 to pay off another credit card/loan.
>> Over simplification maybe?

If you go like this, you still have savings while also repaying debt.
>> Hmm ... 

A-you need to do a weekly breakdown of your spendings (monthly budgets for people in debt/trying to manage money I find is too ambitious).
>> Trying to get this off

B-I reckon it will take you at least 1 year to get out of the serious debt, but it is totally doable provided you dont go mad one day and spend your money on something crazy.
>> Perhaps more than a year?


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## yram (10 Oct 2009)

Hi Paddy,

It does not seem viable that you have nothing to your name except your debt. Ive been in your situation and doing both saving and paying off debt is better than having nothing at all.

You have possibly over a year until you get on top of your serious debt (I didnt mean to imply that you would have it all paid off in a year-I believe in miracles, but your debt isnt going anywhere unless you win lotto).

You need to start thinking long term for yourself.

I am a bit confused by some of your replies to my post, for example:

*Then throw the €100 you are now not saving on with the €105 and you are now paying €205 off another big loan/credit card on top of what you are already paying....then when that one is paid off you take your 205 and what ever was the repayment for the last loan (for example loan 3 €130) and now youve €335 to pay off another credit card/loan.
>> Over simplification maybe?*

Whats over simplified by this? Will you or will you not have more disposable money as you pay off each loan/credit card?

*I think you should be putting €200 savings per month in to one of these accounts. Thats 2400 a year, plus what you have already.
>> Sorry, what account?* 

You should put your €200 savings in to one of the savings accounts that you have (you said you have an online savings account and a credit union, no?). I would put it into the account with the highest interest rate. It might only net you a few quid interest per year, but again its better than nothing, right?

*You should then throw this money at the loan/credit card with the highest interest rate.
>> What's your basis for suggesting I save while paying off debt?
*As pointed out above, the reality of the situation is that you are going to be stuck with this debt for a while. Throwing €200 per month at debt that you will be paying for a while anyways will not make a huge dent in it. From experience (thats all Im talking from) saving that €200 means that if anything happens you or you need money for something badly, you will have it without needing a loan or taking it out on a credit card again.

I dont know why I thought you had a car - think I read something in another post. Ive one more question, what do you spend on socialising per week?

*>> I'll try find out which one has the highest interest rate, I should really know that*

Yes, you should definitley find this out. Are there any possibilities to transfer the balances of any of your credit cards to a 0% interest for a few months? 

*>> I'll have approx 130 / month left as that's what the loan that's about to clear is costing monthly*

Again, I read you paid €105 off loan 1. This is what I read from your original post.

First thing I think you should do is make a spreadsheet of your weekly outgoings.


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## D8Lady (10 Oct 2009)

Here's a link to excel budgets tempates that you can  download for free: Templates.
Find out why you have been declined for 0% cards, perhaps you missed some payments? 
You can do this by getting a [broken link removed] for €6.
It will give you the information that most financal institutions have on you. If there is a mistake you can get it recified or at least can a comment on why you may have been late / missed a payment.


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## PaddyPaddy (11 Oct 2009)

I've looked at my ICB report recently enough (maybe 6 weeks ago) and I've got no missed payments. I've never missed a payment on anything, ever.


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## PaddyPaddy (12 Oct 2009)

Right, got some interest info here ..

*Credit Card €2471 / €2500*
Balance Transfers: 1.3133%
Cash Transactions: 1.3995%
Card Purchases: 1.3133%

*Credit Card €4844 / €5000*
Balance Transfers: 1.6674%
Cash Transactions: 1.8053%
Card Purchases: 1.6674%

*Credit Card €1903 / €2100*
Monthly: 1.18%
Cash Advance: 1.64%

I'm not sure of the interest rates on the loans, I'm gonna try and find out.

I've also tried to apply for loan of €8000 in the hopes of covering the 2 larger of the credit cards.


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## coin (12 Oct 2009)

Ok I had a look at your finances, your net monthly expenses listed is 1315.

You havnt shown your monthly net income or your food/extra expenses.

I would have a look at getting rid of SKY off that, the househould contribution should be cancelled for now, you need that extra 250 to put against your debts. Thats nearly an extra 300 euro

Forget about the savings account put it against the credit cards and personal loans. Personally I would clear all those credit cards off before the loans.


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## PaddyPaddy (13 Oct 2009)

Monthly income approx 1800. I would hope the food / extra expenses would be covered in what I mentioned above but this never seems to be the case (a list of everything I spend will probably help here I guess).

Sky is "only" 30. Is that really unreasonable? I need to get some entertainment from somewhere ...

No choice on the home contrib so that can't go anywhere unfortunitly.


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## Stapeler (13 Oct 2009)

Your home contribution is effectively rent & refuge charges etc, Are you claiming tax relief on your rent and service charges?  Every little helps...


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## D8Lady (13 Oct 2009)

PaddyPaddy said:


> I need to get some entertainment from somewhere ...



Get involved in real life - its much more entertaining

[broken link removed]


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## Celtwytch (15 Oct 2009)

Stapeler said:


> Your home contribution is effectively rent & refuge charges etc, Are you claiming tax relief on your rent and service charges? Every little helps...


 
I don't think you can claim rent relief if you're living with your family.  Also, it is the person who pays _refuse _(which I presume you mean by refuge) charges who claims tax relief on it.  In this case, that would be the OP's parents.


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## PaddyPaddy (28 Oct 2009)

I don't pay refuse charges. The folks do.

I can't claim rent relief on money paid to my folks.

I now have the 3k and 5k credit cards gone and an 8k loan in it's place.


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