# Advice needed on managing Personal Finance & Debt.



## Irisheyes (30 Aug 2009)

Age: 28 

Spouse’s/Partner's age: Single

Annual gross income from employment or profession: €26,698

Type of employment: 
Private Sector Employee

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

Rough estimate of value of home: Not a home owner
Rent €400 a mth
Bills €80 every two mths (ie Gas ESB Sky)
Mobile & Internet €40 a mth

Other borrowings – car loans/personal loans etc
Car loan (BOI) - €8000 loan payments spread over 5yrs - €192 a month for the next four and half yrs.
Credit Card (BOI) - Balance of €6600 and I am only making the minimum payment of roughly €150 a month, Iv just
switched to a 2 in 1 Credit Card also with BOI as I was advised if I transfer my balance from the old card I would have 0% APR
for 6mths, but still abit unsure how this works I'm still waiting on first bill.
Credit Union - Loan balance €8,959 paying €360 a month.
Overdraft Facility (BOI) €850

Savings and investments: No savings, the only thing of value I own would be my car and that is probably worth about €6500

Do you have a pension scheme? Yes a Defined Benefit Scheme with my Employer for the last year, paying €108 a month.

Do you own any investment or other property? No 

What specific question do you have or what issues are of concern to you? 
I am paid monthly and my main problem is the week I get paid I pay no attention to what Im spending and completely blow my budget,
numerous times I have done out a budget and tried to stick to it but something unexpected always crops up, I dont see how I can start a savings account when I have all this outstanding debt it just feels pointless and then it comes to the week before I get paid and
I am completely stressed out with money worries. I know it is my fault that I have left it get out of control for so long, but
I am finally taking my head out the sand! So basically I am looking for the best advise on how to manage my finances and my debt
ie consolidate loans etc..This site has been really helpful and Im glad Im
not the only one out there with Financial worries but I feel if I dont get on top of this now I never will. I know some users will think I have not much to worry about as I am not a home owner or have children but any advise would be greatly appreciated.


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## so-crates (31 Aug 2009)

*Re: Advise needed on managing Personal Finance & Debt.*

Your income is €26,698 (gross I assume) and you have debts totalling 23559 before bills and ignoring for a moment the overdraft. No wonder you are stressed. Even given the repayment in a year is not the total debt it is still a sizeable chunk to be down every month. 

Firstly, that new credit card, do not use it. The 0%APR is probably on balance transfers only so any purchases made on the new card will be charged at the usual rate. Also you need to stop using your credit card altogether and focus on paying it off. Paying the minimum payment will take years to clear the debt. The interest mounts up at a pretty steep rate so you really do need to take the opportunity of these 6 months to clear as much of the current debt on that card as you can. That means you need to up your repayment.

Secondly, budget. You have got yourself into this situation and you are the best person to get yourself out of it. you say it yourself "the week I get paid I pay no attention to what Im spending and completely blow my budget". This is a clear lack of discipline. Even unexpected expenses should not be so large and so frequent that you blow your budget every time you have cash in your account. You have to think of it as if you don't have that cash. Every time you buy something with your credit card you are borrowing money from your own future at a punitive interest rate. Same deal when you blow your budget. It is only your own money you are spending - you have to pay for it sometime.

This is the bit that you already know but have shied away from facing up to. You are going to have to cut back your expenditure. Start by sitting down and looking at all your expenses (rent, loan repayments, CC repayments, car expenses - tax, insurance, petrol & maintenance, household bills, clothing). Calculate their amount over a year, divide them over the twelve months, that is your monthly outgoing. Now look at you monthly income, subtract the two and divide by the number of days in the month, that is your daily living allowance. That is all that you are allowed to spend in a day on food, socialising and day to day discretional spending. The money for your expenses must be set aside and only touched for those expenses. Write down the names of the bills that you are allowed to touch this money for and check that list each time to re-inforce it. This will require you to be very disciplined about your money.
There are two ways that you could approach this, firstly you could retain your bank accounts the way they are and withdraw your daily or weekly stipend in cash and only use this cash for those expenses. I think though, that you would be better off setting up a "bills" account. Each month, FIRST TRANSACTION out of your main account after your wages come in, would put the money for your bills into the "bills" account. Leaving you with your monthly allowance in your main account. All of your direct debits would need to be moved to this account to pay your existing loans. This would give you an immediate picture of what money you actually have. Withdrawing a weekly or daily allowance from this would also help, since it allows you no opportunity to overspend. 

At the end of the day, you are going to have to cut back on what you spend. There is no quick or easy way for you to get out of this and it will take discipline and sacrifice to bring yourself back onto an even keel.


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## so-crates (31 Aug 2009)

*Re: Advise needed on managing Personal Finance & Debt.*

One other thought. Make sure you are claiming all your tax relief. Are you claiming rent relief? Have you claimed it over the last four years?

www.revenue.ie


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## Irisheyes (3 Oct 2009)

*Re: Advise needed on managing Personal Finance & Debt.*

So-crates, many thanks for your post, what a difference a month can make. I took all of your advise on board, I took out all my old Credit Card Bills and saw exactly how I got myself into this mess, safe to say that card has been disposed of so I am trying my best to pay more than the minimum repayment now, I have reactivated an old bank account also so I will be seperating my money for bills and day-to day expenses which is a great idea so I will see exactly what I have to spend each month. For the last two months aswell I have been keeping a Spending diary so I know exactly where every penny is going and surprise myself sometimes when I can get by on €60 a week! I even look forward to checking my Bank account now before I used dread it or just avoid it altogether! I am in the process of applying for tax back on rent also so that will be a nice bonus hopefully which will pay off some credit card debt. I know I still have a long long way to go but I feel so much more positive,this site has been a lifesaver!


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## goingforgold (3 Oct 2009)

*Re: Advise needed on managing Personal Finance & Debt.*

Great to hear you are getting your financial affairs sorted. You have changed your habits just in time. Although you have substantial debts to pay back they are not astronomical in the bigger scale of things and you don't have a huge mortgage to worry about. Just learn from the past mistakes and you'll be fine. Also claim tax relief on refuse fees, trade union fees if applicable. And make sure you get tax back on all medical expenses. Also maybe look for a parttime job if you have the time to bump up your income. The main loans to clear initially are the credit card payments as these charge the most interest. Good luck.


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## so-crates (3 Oct 2009)

*Re: Advise needed on managing Personal Finance & Debt.*

That's brilliant Irisheyes, so glad to hear that you are succeeding and enjoying it! Keep up the good work.


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