# How can I manage my debts better?



## Harley (8 Sep 2009)

Age:* 34*
   Spouse’s/Partner's age: *30*

   Annual gross income from employment or profession: *26'000- E430pw after tax* 
   Annual gross income of spouse:*25'000 -1900pm after tax
+ 166 CB + 41 ECS
* 
   Type of employment: e.g. Civil Servant,  self-employed 
*Both private sector, permanent.*

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

*Rent 675pm*

*Childcare 150pw*
*
Food + bills 225 pw

* 
   Other borrowings – car loans/personal loans etc
*Personal Loan 29000 E140 pw 4 years left*.
*Car Loan 12000 E330 pm 4 years left.
Overdraft maxed E3000
* 
   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 E1200 11.7%
Credit card 2 E1500 9.7% 
Credit card 3 E4000 - 0% interest til May '10
*
   Savings and investments:
*None*

   Do you have a pension scheme? 
*I do, through work*

   Do you own any investment or other property? 
*No*
   Ages of children: *
1.5
* 
   Life insurance: 
*No*


*What specific question do you have or what issues are of concern to you?
While I can manage all my debts ,Im trying to become debt free as soon as possible.  
At the moment Ive got around 600/700e to use towards repaying my credit cards. 

I could consolidate Credit card 2 and the overdraft into my term loan.
My term loan is currently at 7.9% apr .
If I were to consolidate my new repayment would be 174pw for 4 years at an apr of 9.7%

Im not sure what to do, should I plug away at the credit cards / overdraft (cards have been cut up)  or consolidate? Ive already been approved for consolidation, Im just not sure if its the way to go?

(My husband has no interest in the money side of things, so you guys are the only ones I can discuss this with to get some advice) 
My plan is to clear the credit cards and overdraft and then start saving to pay off the car loan early.

*


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## sam h (8 Sep 2009)

> *Credit card 1 E1200 11.7%*
> *Credit card 2 E1500 9.7% *
> *Credit card 3 E4000 - 0% interest til May '10*





> *I could consolidate Credit card 2 and the overdraft into my term loan.*
> *My term loan is currently at 7.9% apr .*
> *If I were to consolidate my new repayment would be 174pw for 4 years at an apr of 9.7%*


 
Increase you term loan to cover CC1 firstly, then CC2.  Keep the one on interest free until the next May.  What rate are you paying on your overdraft?

Good to hear you have cut up the cards, but it would be an idea for both you and your husband to sit down & go throught what you are doing and why.  You also need to try to understand how you ended up in debt in order to prevent it happening again.  

You could consider doing a few things to increase your income - babysitting, rent-a-room etc in order to clear the debt quicker.


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## niceoneted (8 Sep 2009)

I would not consolidate. If you have 600/700 a month to pay off the cards you will have them clear or near clear by the time card 3 is at the end of the 0%interest period. Pay large amounts off card 1 and the minimum off card 2 and 3 until card 1 is clear then pay the large amounts off card 2 and minimum off card 3 until it is clear. Try perhaps to cut back on some bills and shop for bargains/2 for 1 offers in the supermarket on things you regularly use.  It will take a year to clear the cards and overdraft but you will learn a lot in the process which is more beneficial than to just consolidate. 
Did you perhaps consolidate before and is that why your debts have grown?
Agree with sam H that you must figure out how your debt grew and fix that. 
Good luck.


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## Harley (8 Sep 2009)

Hi Sam, thanks for the response,
Unfortunately the term loan is with BOI and they are only willing to consolidate CC2 ( which is BOI) and the overdraft (Also BOI).
Im not sure what the interest is on the overdraft but I pay in the region of E80 every 3 months in charges.

CC1 is with Halifax.

Ive been doing lots of overtime lately and Im bringing in about E100 extra each week, every bit helps to get rid of those CCs.
I can actually pinpoint why we racked up all this debt, my husband is from the US and its only in the last year and a half he has been working, prior to that I was (trying) supporting us as he wasnt entitled to any social welfare. 

Although, hands up, we spent lots of cash on the CCs on our summer holidays and that was after I balanced transfered them to the MBNA 0% for 10 months. I scared me enough to cut up all the cards. Never again!


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## Harley (8 Sep 2009)

niceoneted said:


> I would not consolidate. If you have 600/700 a month to pay off the cards you will have them clear or near clear by the time card 3 is at the end of the 0%interest period. Pay large amounts off card 1 and the minimum off card 2 and 3 until card 1 is clear then pay the large amounts off card 2 and minimum off card 3 until it is clear. Try perhaps to cut back on some bills and shop for bargains/2 for 1 offers in the supermarket on things you regularly use.  It will take a year to clear the cards and overdraft but you will learn a lot in the process which is more beneficial than to just consolidate.
> .



Hi thanks for the reply, 
This is what I was thinking. 
Yeah Ive consolidated time and time again, maybe its a good thing for me that the bank wont consolidate other banks debts anymore. Its got to the stage where Im actually scared that Il never be debt free. I think Im getting slightly obsessed.


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## chlipps (8 Sep 2009)

Good to see that you are trying to take control... but i think you need to get your husband under control also and ensure that he is aware of the debts and issue that you are in. You have a lot of personal debts accrued

I think you need to start recording every penny that both of you spend and then week after week (or month after month) try to reduce it. Every month you should try beat the saving made in the past month even if it is only a few euro. Also you need to challenge every thing that you spend and try go without e.g. sky, excessive outgoings, packed lunch instead of buying lunch daily etc..

Best of luck


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## niceoneted (9 Sep 2009)

Given that you have consolidated on previous occasions I wouldn't do it again. 
You will have a tough first year or so and then things should get easier. Definitely start a spending diary as suggested by chlipps and write everything down from .10c  to anything higher. 
No harm in being a little obsessed as it will keep you on track. Do get your husband to take some of the responsibility too.


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## Harley (9 Sep 2009)

Hiya, 

Thanks for the advice, Im going to snowball all my debts and not take out any more loans (Thanks Ted!)

Chlipps, Il do that, hopefully Il be able to add an extra 100 or so monthly by being more careful.

Wish me luck and Il come back in 6 months or so with an update!


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## Manica (28 Sep 2009)

Hi Harley,

Just responded to someone else with very similar problem if you like to have a look at the response there.

http://www.askaboutmoney.com/showthread.php?p=936913#post936913

Well worth the read if you like to know more.

Best of luck

TK
www.biz-mania.com


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## D8Lady (28 Sep 2009)

I found this debt consolidation calculator, you might like to plug in the values and see the results. 
Also, if you have Excel, there's quite a few budget tempates that you can download for free - just pick the one the most suits your circumstances. 

Have a look at the key posts, especially "how to cut your day to day expenditure" thread. All the little cuts really do make a difference.
Best of luck.


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## Harley (29 Sep 2009)

Hi, thanks for the advice Manica and D8lady.

I checked out the consolidation calculator, its very interesting but I dont think Id be able to consolidate all my debt though.

I have been proactive though, I requested a laser card for an unused current account I have set up on my online banking. 

So from now on my husband is on a weekly cash budget of 70e per week for his day to day spending and diesel. Il be using the new bank account for my weekly grocery/spending budget of 80e per week. Each month Il transfer enough to last us the month. 

All other money ( wages, salary, CB etc) stays in our main current account or, as I now call it, our debt account to service repayments, direct debits etc and whatever is left over goes towards the credit cards.

Good news for our debt account, I have been awarded just over 500e PRSI rebate. Its going to be used to pay off more debt ofcourse!


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## goingforgold (29 Sep 2009)

Fair play to you. Looks like you got a plan of action and have got things somewhat in order. One note of caution though. A family of 3 expected to live on 150 euro per week might be slightly optimistic. There's bills like esb, phone etc as well as clothes to buy and weddings to attend etc. I think if you try and live on too little sometimes the bubble bursts and you could go back to your old habits. Give yourself a reasonable, but achievable budget. Good luck.


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## Harley (29 Sep 2009)

goingforgold said:


> Fair play to you. Looks like you got a plan of action and have got things somewhat in order. One note of caution though. A family of 3 expected to live on 150 euro per week might be slightly optimistic. There's bills like esb, phone etc as well as clothes to buy and weddings to attend etc. I think if you try and live on too little sometimes the bubble bursts and you could go back to your old habits. Give yourself a reasonable, but achievable budget. Good luck.



Hi, no the 150 is just for food and essentials per week.
All the bills, childcare and credit card and loan repayments will go out of the debt account.

Was thinking it might go something roughly like this;

Debt Account

In; 1936 (his salary)
     1720 (my wages)
     166 (Child benefit)
      41 (ECB)
= 3863

-600 to New account (150 per week)
-675 (rent)
-600 (childcare)
-330 (car loan)
-560 (personal loan)
- 50 (minimum CC1)
- 50 (mimimum CC2)
-50 (minimum CC3)
-70 (2 x car insurance)
-25 (Sky)
-25 (IP Phone)
- 36 (internet)
-100 (ESB)

= 2571

3863-2571= 1292

I'm sure Im missing something in my outgoings cos Im left with alot more than I have had the past few months. Maybe I was spending more than I thought I was on non essentials?
So anyways I was thinking at the end of each month Il use the surplus towards paying off  a credit card or use it in part to buy oil or whatever else might crop up.

What do you think?


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## missdaisy (29 Sep 2009)

Hi harley, it's good that you are putting a plan in place. Your husband really needs to know the situation and you need to be able to talk to him about it as it is going to be tough to stick to a budget all the time. Just re your outgoings you are going to have other expenses that you don't think of because they don't crop up on a weekly basis, e.g. doctor, dentist, optician, car repairs, medicines, weddings, clothes, birthdays, Christmas etc. So don't make things too tight for yourself or you will get disheartened.


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## Harley (29 Sep 2009)

Hi MissDaisy, 
My husband knows and hes just not interested in our money affairs, if I said to him, heres 25e to last you the week he'll just say 'ok' and leave it at that. Maybe thats a good thing in a way as it gives me full control of our finances!

I was thinking that maybe when the occassion arises eg car maintainence, new clothes, etc I could dip into the debt account (without losing the run of myself!) as Id only pay out the surplus on debt when the next lot of wages go in.

I guess Il have to play it by ear and tweak some things as time goes by.

Thanks for the imput.


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## missdaisy (29 Sep 2009)

Maybe you could open a second account, set up a standing order into that account aswell and pay the bits and pieces that crop up from the second account? I think keeping a spending diary is a great idea too, you'll see very clearly from that in about 8 weeks exactly what you spend your money on and how realistic your budget is. Good luck!


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## Harley (29 Sep 2009)

Good idea, I actually have a savings account online as well as the two other current accounts (from when it was easy to open new bank accounts!)
I've got a cash card to go with the savings account, I just need to get a new pin number reissued. 
Good thinking, thanks!


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## D8Lady (29 Sep 2009)

Hi Harley, 
Great stuff in getting it together, its painful when you see it all broken down but a real sense of achievement when the balances start coming down.

Just on the E500 windfall - perhaps that money could be set aside for those unpredictable expenses e.g doctors, car repair, large winter heating bill or boiler service etc. 

Knowing that you have a few bob tucked away in case of emergency would ease the pain of having a bill like that hit you and throwinig your plans astray.


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## Harley (29 Sep 2009)

Thats a good point, Ive also got 300e due later this month, believe it or not but my work pays us a perfect attendance bonus every 3 months so that added to the 500e should make a nice little cushion. 
Il lodge that along with the cheque into the savings account.
Thanks so much for the help, you all have helped me get my head around the whole situation. Everything is so much clearer now.


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## chlipps (29 Sep 2009)

In current climate, i cannot understand why your husband is not interested in financial issues. It is important that he becomes involved asap and assists you resolve the issue above

Note be careful with too many laser cards as you wll have an annual stamp duty on each


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## Harley (30 Sep 2009)

Thats a good point about the laser cards Chlipps.
Ive got an appointment with my Companys Financial Adviser (free of charge) on Tuesday where he will look at the income and outgoings and see if I can manage it all better.
Il update once Ive spoken to him.


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## Harley (2 Oct 2009)

Small update,

I see I got my figures wrong in post#13 I added my outgoings up incorrectly, Ive got E692 surplus instead of the E1292, I knew something didnt look right!

Ive been on the phone to Halifax with whom I have my CC1 balance of E1200.
They have agreed to reduce my rate to 2.9% for 3 months and balance transfer the total owing on CC2 which is E1500 so Il have a total sum of E2700 at a rate of 2.9% for 3 months starting next month.

Im waiting on a 6month 0% balance transfer Credit Card from Tesco, I just have to send off the last bit of paperwork. So once thats through I'll transfer again from Halifax.

Hmm, I wonder does the 0% 6 months offer start when the card is issued or from when the first balance is transfered? 

Also I received my cheque today for E515 so I have E650 in my debt account , the child benefit and ECS will increase that to E850 and with my bonus I should have E1150 available to pay a nice chunk off my my new 2.9% CC.

Hopefully an unexpected expense wont turn up and throw a spanner in the works!


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## Bronte (5 Oct 2009)

How easy was it to negotiate with Halifax - for the benefit of others on here that need to?


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## Harley (5 Oct 2009)

Bronte said:


> How easy was it to negotiate with Halifax - for the benefit of others on here that need to?



Hi Bronte, it was no trouble at all.

I just rang up and asked to speak to the retention team. I told them that I had an option to transfer my balance to a different credit card company for 0% but didnt want the hassle, what could they do for me?
They offered 2.9% for 3 months or 6.9% for 6 months on the balance (excluding purchases I think) 
Because I have a credit limit of 2750 they let me transfer my BOI balance over as well.


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