# Financial Advice - How bad am I?



## Wheeler_2007 (17 Dec 2007)

Hi All,

This is my first time posting, so please bare with me. I would really like some advice on my current financial situation and see what you think of my curent state:

I take home €2600 / month
Loan repayment of €370 / month with bank - totalling €17,000
Loan repayment of €120 / month with Credit Union - totalling €4,000
Credit Card is apx. €2,500 - repaying apx. €200 a month on this
Rent is currently €550 / month
I am trying to save about €250 to €300 a month in Credit Union
I am putting in €200 / month in company share scheme

On top of these, I have the usual expenses such as car, gym (€70/month), etc. I do feel some pressure coming towards the end of the month, and would like to be able to budget quite a lot better than I currently am.

What I am really looking for is some advice on, firstly what you think my current state of finances are (and how bad it may be), and secondly, what would be the best form of attack to try and get some of the debt down. 

Thanks,

Wheeler.


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## ClubMan (17 Dec 2007)

Wheeler_2007 said:


> I take home €2600 / month


Presumably you are on about €37K gross? If so then you have debts representing c. 60% of your gross annual income. Not the worst that I've seen posted here but it makes sense to get this down.


> I am trying to save about €250 to €300 a month in Credit Union
> I am putting in €200 / month in company share scheme
> 
> On top of these, I have the usual expenses such as car, gym (€70/month), etc. I do feel some pressure coming towards the end of the month, and would like to be able to budget quite a lot better than I currently am.


Saving and spending on non essentials makes no sense to me while you have debts that should be prioritised for reduction/repayment. 



> What I am really looking for is some advice on, firstly what you think my current state of finances are (and how bad it may be), and secondly, what would be the best form of attack to try and get some of the debt down.


You should list out the debts most to least expensive in terms of rate charged and prioritise the most expensive for attention first. Or try to consolidate some or all onto cheaper credit which you will then work to pay off. You should look at the key posts here and in the Banking/Budgeting forum for tips on how to assess your situation, how to draw up a spending budget and stick to it etc.


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## Wheeler_2007 (17 Dec 2007)

Hi Clubman, thanks for responding.  My gross pay per year is €43,500.  The €200 per month into shares is benifit in kind, so no tax on these.  I would like to try keep saving is possible.  Would you consider my financial situation not too bad then?


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## Guest120 (17 Dec 2007)

Wheeler_2007 said:


> Would you consider my financial situation not too bad then?


Your financial situation isn't too bad, your financial knowledge stinks to high heaven. 

Stop saving when you have still have high interest debts, simple as.


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## ClubMan (17 Dec 2007)

Wheeler_2007 said:


> The €200 per month into shares is benifit in kind, so no tax on these.


This makes no sense. Most _BIKs _are subject to income tax and _PRSI_/health contribution deductions. Why do you think/know that this benefit is exempt?


> I would like to try keep saving is possible.


Makes no sense when you have significant debts.


> Would you consider my financial situation not too bad then?


Not the worst that I've seen but you really need to reduce your high cost, unsecured debts. Redirecting existing regular savings and savings attributable to better budgeting/cost cutting towards this end would make sense. For example it makes no sense to me to be making regular savings or paying gym membership (just go for long walks!) when you have significant debts outstanding.

Post more details (e.g. specific rates and terms) of each debt that you have.


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## Wheeler_2007 (17 Dec 2007)

Thanks, out of college 2 years or so and I'm still getting to grips with it.


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## Satanta (17 Dec 2007)

Wheeler_2007 said:


> I would like to try keep saving is possible.


If you want to save to build up for a "rainy day" (e.g. loss of job etc.) then this can be beneficial. It depends on your own personal circumstances and wishes as to how much you want to have saved (common rule of thumb of two or three months salary), if you do want an emergency fund.

In general the debts are costing more than the savings, so in the long run you are losing money by saving (this doesn't take into account the peace of mind of having an emergency fund which is the obvious exception). 

Tackle the debts in order of the highest cost (APR) and reduce them by the max amount possible each month. If you can switch your CC balance to a 0% transfer for 6 or 9 months this will help maximise the capital cleared and reduce the interest payments (if you switch, be sure to understand the consequences of not clearing the balance in full by the end of the introductory rate. Some cards will apply a % to the full balance for the full term if the total amount is not cleared within the interest free period). 



> Would you consider my financial situation not too bad then?


You have a healthy income and should be in a position to service your existing debt without too much hardship. The question is really why you got into this position (was it a year off travelling or simply overspending on a continual basis) and how you can avoid getting into this situation again.

Lots of help in other threads to assist with revewing your general finances (budgets, spending diary etc.).


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