# Constantly overdrawn - help?



## carina (25 Apr 2006)

Hi guys, was wondering if someone might have some advice for me? 
I've just recently moved into my own apartment and while I expected to struggle at the start I am completely broke and max out my overdraft every single month. 
Income €1750 p/m
Mortgage €450 
SSIA €120
Personal loan €200 p/m 
Car Ins is €100
Petrol €100 p/m 
Food €200
Ad hoc house things (alarm, tiles etc.) €200 p/m
Bills €60 p/m
Phone credit €100 p/m
I owe about €600 on my credit card, I literally dont have a spare cent so therefore any money spent on entertainment, clothes etc; means either overdraft or credit card.
Any ideas of what I can do?
I am getting very stressed about it.
Carina


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## gar123 (25 Apr 2006)

hi carina

first off congrats on getting on the properrty ladder with luck your property will rise in value and in a few years the worries are gone

do you know what rate you pay on the cc? when does your ssia mature?

this 120 will add straight to your spending power then and ease things


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## SteelBlue05 (25 Apr 2006)

How are you spending €100 per month on phone credit?! Seems very high...surely there is €50 euro you can save there straight off by cutting back.


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## CCOVICH (25 Apr 2006)

1.  Can you transfer the outstanding credit card balance to a card that offers zero interest on balance transfers? This will allow you to pay the balance over a few months.
2.  Phone credit of €100 per month strikes me as high-can you make less calls?
3.  Entertainment and clothes etc. are surely discretionary and should arguably be sacraficed until you have the situation more under control (less stress).  I presume €200 on tiles and alarms etc. will cease after a number of months.
4.  Is petrol of €100 per month a necessity-can you make more use of public transport or just walk?

You could contact MABS for more advice. There are also many existing threads on this issue.


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## carina (25 Apr 2006)

Thank you, it was quite a struggle in the end, hence the Personal Loan! My SSIA doesnt mature until the bitter end - next April. The credit card is with BOI - I didnt even think to check the Interest rate, its 16.8%!


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## SteelBlue05 (25 Apr 2006)

Have you a spare room you could rent out for a while, you can rent out rooms tax free (up to about 7k per year) under the Rent a Room scheme...


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## carina (25 Apr 2006)

Thanks CCOVICH, I do try to spend less on credit, will try and cut back more. I thought that €25 per week was ok! I only use car for work, cannot get public transport, it doesnt go near my job. I am spending little or nothing on entertainment etc but can't stay in all the time!! Hopefully the €200 will cease soon but theres just so much to pay for!


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## carina (25 Apr 2006)

No spare room unfortunately, its a 2 bed apartment & I bought with a friend so thats both rooms occupied!


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## SteelBlue05 (25 Apr 2006)

assuming you and your friend are both first time buyers are you claiming the interest relief on your mortgage? Works out at about 66 euro per month, i.e. 33 euro for each of you every month for 7 years....

Also, you may be able to claim tax relief on bin charges although thats only 40eurp per year so its not going to help much.


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## carina (25 Apr 2006)

Yes we are claiming Interest Relief on mortgage. Is it worthwhile to change Credit Card providers? EBS seem to have a lower rate (around 10%) Is it simple enough to do?


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## CCOVICH (25 Apr 2006)

Avoid paying any interest on your credit card-move to one that has an interest free period on balance transfers.

You should not incur any further debts on your credit card as this is only going to make things worse.

Note that you do not have to keep contributing to your SSIA.  It may make finacial sense in the medium term, but if debt is causing you stress at the moment, the €120 could ease some of that stress now.  You will not lose the benefit of the 25% bonus earned to date if you stop contributing, but leave the existing fund in place until maturity.


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## SteelBlue05 (25 Apr 2006)

I believe it is easy to change credit card providers, switch to one with 0% interest (for x months) as previous poster suggests.

Also, are you on free banking? e.g. AIB have free banking if you use the mystro card, it saves me about 20 per quater, again not much but every bit counts!

What TV provider do you have, do you have the basic package or are you spending extra on extra channels?


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## carina (25 Apr 2006)

I really want to continue with the SSIA. Will really try to cut down on call credit, magazines, random things first and see if that works. 
Will look into getting a card with 0% on it though, thanks for that.


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## carina (25 Apr 2006)

Also, are you on free banking? e.g. AIB have free banking if you use the mystro card, it saves me about 20 per quater, again not much but every bit counts!

What TV provider do you have, do you have the basic package or are you spending extra on extra channels?

No am with BOI so no free banking at all!! Quite the opposite infact.
I'm just afraid what with the mortgage, bills etc that changing banks might cause me even more stress? Is it simple or will it take weeks? I dont have much fate after these last few months! 
We have NTL but only the basic package which is free at the moment.
Am definitely going to look int this new Credit Card.


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## SteelBlue05 (25 Apr 2006)

Another big spend is lunches, with sandwiches being €3-€5 euro that adds up to about €50-€80 per month so maybe you could look at brining a lunch with you to work.....


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## SteelBlue05 (25 Apr 2006)

theres a post here about BOI Free banking....

http://www.askaboutmoney.com/showthread.php?t=16931


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## carina (25 Apr 2006)

I actually go home for lunch so dont spend that kind of money thank god! Although come to think of it going back & forth every day is probably pushing petrol spend up!
Will check out that thread now, thanks!


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## annR (13 May 2006)

Carina

I think your phone credit is extremely high.  Either make less calls or switch to a better rate!  I pay E10 *a month* phone credit.  Admittedly I hardly use the thing.

What is Car ins?  

E200 strikes me as being quite high for food for just one person (maybe not if you go home for lunch).  You might be able to reduce that by having a look at your bill and seeing what is actually not good value or you can do without.  Where do you shop?  Do you buy much packaged stuff or ready meals etc

*Definitely* transfer the balance on your credit card to zero interest  Have you tried to calculate what the amount in interest is each month?   You should be aiming to not be paying any interest at all on anything.  

I bet if you made a few changes, even though separately it might not look like much savings it would really really add up.  I wouldn't cash in the SSIA if you can help it.  

I do think that you need to lay low and keep clothes shopping/random/going on to a bare minimum until you get control over things.


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## annR (13 May 2006)

Your expenses as you have listed come to 1530 which leaves you E220 to spare at the end of each month.  If you have this money, pay off car loan (providing you have transfer credit card to o% interest on balance account).  If you don't have it at the end of each month it means you are spending more money than you have listed.  You need to identify where it is going.


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## Sherman (15 May 2006)

Also, see this thread (http://www.askaboutmoney.com/showthread.php?t=534) which deals with a lot of similar issues to your situation.


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## ClubMan (15 May 2006)

SteelBlue05 said:
			
		

> assuming you and your friend are both first time buyers are you claiming the interest relief on your mortgage? Works out at about 66 euro per month, i.e. 33 euro for each of you every month for 7 years....


 Shouldn't that be €66.67 p.m. owner occupier mortgage interest relief *each* assuming that the interest bill on the mortgage is more than €8K p.a.?

Are you claiming all other tax reliefs/credits/allowances to which you are entitled? This thread summarises some of the more common ones:

Common PAYE tax credits and reliefs


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## PGD1 (15 May 2006)

you need a car for work, and yet you manage to drive home for lunch every day?

At the very least stop this, and cut your fuel bill in half.


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## lff12 (15 May 2006)

carina said:
			
		

> Petrol €100 p/m
> Food €200
> Phone credit €100 p/m


 
These would be the areas I'd try to change.

Do you really need to spend 100 pm on your phone - its €1200 per year!  If its on a PAYG account change to a monthly bill with vast amounts of free minutes, or avoid making daytime calls - potential savings are around 55 euros a month here.

Food - I once lived on 10 euros a week for food by buying loose meat from the butcher and vegetables from the grocer.  Sounds extreme but there's a huge differential.  You could certainly shave off 40-50 euro by buying fresh veg from the grocer and meat from a butcher and eschewing convenience foods.  Alternatively avail of bulk buying deals and fill up the freezer.

Petrol - walk or cycle if at all possible.

Only other thing I can suggest is to switch off and plug out rather than leave devices on standby - they use about 80% of the eletricity of leaving it on all the time.  You'll save 20-40 euros a bill on this.

Likewise don't turn on the heating when you're not there or if its not required.


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## cardigan (15 May 2006)

As well as reducing expenses, is there any way you can earn some extra income? Change jobs? Ask for a pay rise? Do some part-time work to clear the debts?


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## D8Lady (15 May 2006)

Shop in Lidl or Aldi. the grocery savings can be enormous.


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## mell61 (16 May 2006)

Along with a couple of the other posters I would agree that there appear to be a couple of areas you could cut back, so take some time out to investigate them:
Phone bill - Eu100 does seem extremely high, can you change provider and get a better deal - www.callcosts.ie will give you an idea of who will give you the best package, if you have a relatively good idea of when you call, how much you text.   Also have you and your flat mate considered getting a landline instead, it may work out better value.
Car Ins - i'm assuming thats you insurance, which without knowing your car / age, does seem a bit on the high side.  Have you shopped around to see if you can get a better rate, i do it every year on renewal and the savings can be up to 40%!   Has your car a large engine, could you move to a smaller car.
Car petrol - how many unneccessary journeys do you take?  I'll fully admit that once a car arrived I suddenly became allergic to walking a few hundred meters to the shop!  Stop driving home for lunch, what you're saving on sambos you're spending on petrol!  Have you checked out if anyone in the area is likely to want to car pool, there was a website launched a few months ago, hoepfully someone can find the link - see about splitting the costs
Food - check out local markets / farm shops, between 2 of us we spend about Eu40 per week on food, buying from butchers and market.   We can easily fill 2 large bags with veg for about Eu10-14!    Supermarkets are convenient, but there is a reason they are so profitable!  Plan you main meals, decide at the weekend approximately what you'll eat during the week, not planning can be costly.
Ad hoc house stuff... can you wait a couple of month to get some of the things?  We're 5 months in our house, and having moved from a 2 bed apt to a 4 bed house we were 'short' lots of pieces of furniture, but we wait until we have the cash before we buy it.   No kitchen table, but also no loan for a kitchen table.    Just because 'everyone' you ever met has their places done up,doesn't mean you have to, and waiting can mean you get good deals when sales come up, we saved 50% on our floor tiles.
Credit Card - definitely take some time to shop around, interest free is where you want to be!    

As an aside I have found 2 books good for helping to identify the financial pitfalls we face, what I like about both of these books is that the authors have been in debt and have gotten themselves out of debt:
Your money or your life - Alvin Hall
Debt-Proof Living - Mary Hunt
While these aren't Irish writers, Alvin is American writing for UK market and Mary is American writing for american market, both have good strategys for handling your money.

Congratulations on getting on the ladder, and we know you can make it.


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## wavelength (16 May 2006)

I used to have a credit ph and spent about E100 on credit a month. I swtiched to o2(It was a corporate deal and available as the majoirity of my colleages wanted to do it too) but now I have a bill phone which is much handier-my first bill was E38 for the month&I really was ringing and texting alot that month and now I also send most of messages from the O2 website so it is even lesss. Maybe you could switch networks. Also a friend of mine (in the uk but I would say it is similar here) plans her monthly shopping and gets it delivered(its free) that way she spends just what is necessay and doesnt end up buying things she doesnt need and said she has cut down on her food spending.


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## golden mean (18 May 2006)

Do you have anything that you don't want anymore that you could sell to raise cash to pay off some of your loans? You would be amazed what some people sell on eBay, or there may be a car boot sale near where you live where you could offload some old books, clothes, costume jewelry, CDs.....


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## woods (19 May 2006)

You say that you can no longer afford to go out at night so why not pop down to your friendly neighbourhood pub and get a part time job. You may find that you enjoy it.


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## carina (23 May 2006)

Thanks for all the advice guys! 
Im determined to get myself sorted out. Have cut down on call credit as I agree its a ridicules amount. 
Might look for a part time job (waitressed for years) 
My car is a 1ltr & its a '92 so I dont think I can cut back anymore. 
The food thing I will discuss with my flatmate, shes loaded & we shop in Superquinn, she makes me feel bad by how much she has to spend - I guess I try to keep up wit her sometimes. 
Will take all of your advice on board. 
Def switching credit cards!!


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## annR (23 May 2006)

Carina

Do not have anything to do with shopping in Superquinn!  Don't feel bad about wanting to shop in Lidl or Aldi.  There is nothing wrong with the quality.

Ann


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## carina (23 May 2006)

You're right Ann, the reason we shop there is because its the closest! We're probably being lazy tho, will start to shop around. Am going to look into getting a part time job to help me get on top of things. Will also start a money diary to find out where its all going! 
Golden Mean, I prob do have stuff I could get rid of but I always presumed that selling on EBay was just too much hassle! Will look into it tho.........


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## Guest107 (23 May 2006)

One weeks money diary should be all you need Carina  , I'm sure you will balance the books pretty fast once you identify a few frivolities that can be chopped out of the budget .

Do remember that its actually worth borrowing off a credit card to up that SSIA because in the last year a CC would cost you say 17% a month but the governemnt gives you 25% . Get an interest free 6 or 12 month introductory offer and do not use that credit card. When teh interest free period is over do it again. Then use the ssia money, the taxpayers money if you will,  to clear the cc this time next year. 

Stop buying 'house stuff' for 6 months is my instinct and that petrol bill looks a tad high to me if you live that close to work .  

Things started to improve when you started the thread so do not worry. You can sort it .

also see

http://www.shoppingbill.com/

especially this bit 

http://www.shoppingbill.com/basket_price.php?id=1

before you go shopping AND

http://www.revenue.ie/

where you now claim your tax rebate on last years bin charges , middle of that page  , it will take you only 1 min starting now.


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## askalot (23 May 2006)

2Pack said:
			
		

> Do remember that its actually worth borrowing off a credit card to up that SSIA because in the last year a CC would cost you say 17% a month but the governemnt gives you 25% . Get an interest free 6 or 12 month introductory offer and do not use that credit card. When teh interest free period is over do it again. Then use the ssia money, the taxpayers money if you will, to clear the cc this time next year.


 
Was this a joke?

The interest free period is or balance transfers and never for cash advances. Probably one of the strangest bits of 'advice' I've read - hopefully the OP didn't listen.


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## Guest107 (23 May 2006)

askalot said:
			
		

> Was this a joke?


Not if you can count. If you can't I was being funny all right 

Her SSIA is being fed €120 a month and is in its last year . The government contribution of 25% is equal to 25% interest a year .

If she found another €130 from any source, even a credit card or  overdraft !!!!!!! it would be worth putting it in her SSIA becuase she would have more money next year. I will tabulate the figures for you askalot , its pretty clear


Overdraft Interest c 12%  SSIA Interest 25% Profit *13%* 
CC Interest c 17%           SSIA Interest 25% Profit *8%*
Car Loan  Interest c 9%     SSIA Interest 25% Profit *16%

*I have been known in the past to get a variable rate car loan, it being the cheapest form of loan , and paying off the other loans and cards with it . You may pay this off early as you find savings especially on the house and superquinn.  

To deal with the overdraft here is the plan.

1. get deposit account and thats the end of the overdraft car loan sorts that . 
2. keep €1000 of the car loan in your account at all times . You must never drop below €1000 except in dire emergency
3. The €1000 is your overdraft fund, if you ever dip below €1000 you must cut back to get it back to €1000 . 
4. find €130 a month for the SSIA first , max it. Brian Cowan gives you 25% topup  every month. 
5. next year take the extra ssia fund, 130+25% = €162 x 12 months = €1950. You will ringfence that money and pay that €1950 off against your car loan next year . 
6. credit card for dire emergencies only . Do not use for 1 year to train yourself. If you cannot resist using it then retire it for a year . Snippety Snip! 
7. use personal loan money of €200 to pay off car loan every month, thats €200 a month for now and the ssia fund from next year = €200+€120 a month. 
8. You have savings from cc and overdraft interest to help find the €130 for the extra SSIA  . A few cutbacks will do the rest. 

Does that look better for you once you crunch it , especially once the ssia comes in and you clatter that car loan ????


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## mell61 (23 May 2006)

But would the poster feel that she gets value for money when the payout comes and she owes it to her credit card company?   The sums may make sense, but money is emotive and how you feel paying out your gains back to credit card is a factor...

Carina, try keeping a money diary for a week or 2, note everything down as soon as the cash / card leaves you purse (forget about feeling foolish, debt feels worse), don't try and fill it in later that day, you will forget the small things.   
Then look are where you're spending you cash, do you find that at the weekend you end up buying a few magazines, that coffee in the morning, the toll because you never got around to getting that Easypass!!!   Its surprising where you find you're money going when you start to track it.
Try and cut down on withdrawing money from ATM, make 1 withdrawl a week, and try and keep to using that...  Being aware that the Eu10 note in your purse has to keep you going until Fri, and its Wed, does stop and make you think of what you're buying.


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## Guest107 (23 May 2006)

mell61 said:
			
		

> But would the poster feel that she gets value for money when the payout comes and she owes it to her credit card company?   The sums may make sense, but money is emotive and how you feel paying out your gains back to credit card is a factor...


Very true mell. I am trying to get her to swap expensive loans out for cheaper ones. 

CC Interest 17% . This must go first.
Overdraft 13-145 . This must go next.
Personal Loan c 10% this can be tackled next.

Roll it into a car loan which is cheaper above about €5k and costs circa 9% but there is good news today.. 

a) In case of emergency she now has €1k cash which is an instant overdraft from her to her. Thats her new floor, not what the bank gives her. She is out of money unless she has her €1k .  

b) She is borrowing money at a lower rate than before to make some money with the SSIA, that extra money will be used to pay off her loans . She managed an ssia for 4 years already .

c) Her ultra short term target is therefore to find savings to pay the €130 into the SSIA every month . She must up that ssia tomorrow and find that money by the end of the month !!!!

Her next goal is to increase payments to this car loans above €200 if possible in increments of €20 a month and in a good month €40 .

The original SSIA , funded until now,  which is the €120 a month + the rest  bit is not to be touched , it must still go in every month but I want Carina to reward herself for a good result after 1 years discipline and lowering of stress levels . She can start planning that too  


That diary helps her plan all of this. Its a must for a few weeks.


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## carina (23 May 2006)

Thank you guys! I am going to print all advice off and sit down wit a pen & a lot of paper tonight. I feel that I can do it and will be very proud of myself when I am debt free. Will let you all know how I get on with the diary- even just thinking about it I think I kno the problem areas already....
Will definitely up the SSIA.


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## Murt10 (23 May 2006)

Carina

You say that you come home for your lunch. So do I and I enjoy it and wouldn't change it. 

Depending on where you are working and living in Lucan you may pass by Tesco in Hillcrest every day. They always have food marked down to 1/2 price that is approaching its best before date - ideal for immediate consumption or freezing. 

There is also a Lidl beside the Penny Hill and an Aldi on the Fonthill Road. 

Avoid Superquinns at all costs. They are very expensive. If you have to go there, never go there on an empty stomach. Superquinns used to put their prices down to 50% off similar to Tesco on fresh produce that was approaching its sell by date but they now only normally reduce it to 30% off. Given that they are usually more expensive than the other shops in the first place there is not much of a saving even at 30% off.

Your car Ins seems very high for someone driving such a small old car. I presume that you are 3rd party insurance only. No point in paying for anything else except windscreen insurance.

Finally, Leave your CC and your cheque book at home. 
For some reason it's much harder to pay cash for something than run it up on a CC or write a cheque. If the item is in any way expensive and you really want it, go back the next day, and you will be very surprised at the number of times that you no longer desire/need yesterdays must have item.

Also if you are carrying a debt on your CC, then buying something which is reduced on it is not sensible unless you are in a position to pay off the debt.

WWW.fool.co.uk is another website that can be useful for anyone looking to cut back.  Go to the get out  debt  section and follow the links.  

Murt


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## lff12 (23 May 2006)

Here's one trick that worked for me with credit cards:

Take a small bowl of water and fill her up.
Place credit card in bowl.
Stick it in the freezer.
Next time you are tempted to make an impulse purchase on the CC you'll have to wait until the ice defrosts - which gives you time to think about it and hopefully change your mind!

The main thing I'd say is prioritise your debts.  Don't fall behind on the essentials.  Give yourself small (cheap!) rewards or you'll get fed up.

Good luck!


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## CCOVICH (23 May 2006)

lff12 said:
			
		

> Take a small bowl of water and fill her up.
> Place credit card in bowl.
> Stick it in the freezer.



Slightly OT-would the card still work after defrosting?


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## mell61 (24 May 2006)

I've heard this suggested before, I think the reasoning behind it is that you can't use boiling water or microwave to defrost it, as it will banjax that magnetic strip, so you have to leave it to defrost overnight....  giving you time to decide if you actually need to use it!    
A bit extreme, but hey if it works...


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## casiopea (24 May 2006)

A friend of mine does the frozen credit card thing too.  She didnt want to cut it up as charges are incurred closing the account and then ordering a new one. As Mel61 says she has to wait for it to defrost before she can use it. 

I think the magnetic swipe got banjaxed anyway (its been defrosted a few times now) but she's still freezing it, dethawing it, using it, freezing it etc.


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## lff12 (24 May 2006)

Bizarrely it does work.

Alternatively give it to somebody to trust to keep it away from you (this has also worked).

I'm a terrible credit card junkie.  My main habit is to run it up within 10% of the credit limit, then spend 5 months paying off the whole lot - and start all over again.  I think I just shouldn't be given credit.


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## conor_mc (24 May 2006)

lff12 said:
			
		

> My main habit is to run it up within 10% of the credit limit, then spend 5 months paying off the whole lot - and start all over again. I think I just shouldn't be given credit.


 
This was me too.

I sat down and worked out my irregular bills during the year, basically stuff that wasn't more or less a monthly bill. I was shocked at how much I was trying to absorb into monthly cash-flow. I never stood a chance, so the goal has to be to build up a fund that spreads these costs into 12 even payments.

Car insurance, car services, road tax, birthday presents, Christmas presents (and booze!), Summer holidays, any sort of college/exam fees. All of these add up and you feel you're only getting one thing sorted and another lands on you. Yet, put aside 200-300 per month and the whole lot takes care of itself.


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## Guest107 (24 May 2006)

I moved my car insurance to April because of that cashflow crunch . It was a nightmare (with the company) getting a 3 month policy then a 12 month (Jan-Mar) but well worth it. 

Leaves me feb and march to accumulate after christmas.


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## lff12 (29 May 2006)

conor_mc said:
			
		

> This was me too.
> 
> I sat down and worked out my irregular bills during the year, basically stuff that wasn't more or less a monthly bill. I was shocked at how much I was trying to absorb into monthly cash-flow. I never stood a chance, so the goal has to be to build up a fund that spreads these costs into 12 even payments.


 
I think thats a very reasonable statement which would apply to most people on or below an average wage.  For a lot of people even stuff like car tax or insurance is between 300-600 (if not an awful lot more for young fellows) so it is hitting you in the pocket.  Especially if you're paying a jumbo mortgage or high rent.

One of the biggest problems I have is that fact that eircom, bord gais, bt, and ESB all bill every two months - but almost none of them seem to bill on a regular date so I generally get bills between 6-10 weeks apart on whatever date they feel like it.  There is surely a case for competitors to bill on a monthly basis (which would suit people paid monthly) - though sadly with the case of ESB and BG there simply is no competition and unless things change dramatically, unlikely to be for a long time.

Also I find that with a very temperamental postal system its happened once or twice that the bill only arrives the day before the direct debit is due.  And incidentally some companies now insist on you paying by direct debit if you're a first time customer or tenant, which makes it even harder to manage.  I find in Ireland that after living in the UK and Germany at some point, Ireland is a very non-consumer friendly country in which to live.

Having said that people here are their own worst enemies - I read in the Post yesterday that apparently 50% of all eircom customers will not change company even if they find a cheaper option!


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