# 27, broke, badly need a Money Makeover



## Smashed (30 Jul 2010)

Age: 27
Spouse’s/Partner's age: Single

Annual gross income from employment or profession: 26k plus variable shift allowances of approx 5-8k. Approx 1700 - 1900 per month. Also monthly payment in the form of One4all Gift vouchers approx 200-300 in gift vouchers. I think these can be taken in cash but their may be tax payable.

Annual gross income of spouse: -

Type of employment: Private Sector 

In general are you:
(a) spending more than you earn


Rough estimate of value of home: No mortgage, fortunate to live rent free in family owned apartment.


Other borrowings – car loans/personal loans etc
Car loan 292 per month / 16k outstanding 
Personal loan 351 per month / 3500 outstanding
Personal loan 180 per month / 4k outstanding

Do you pay off your full credit card balance each month? No, pay minimum at 4% per month
If not, what is the balance on your credit card? 12,500

Savings and investments: 
PIP 100 per month (Balance 600.00 - balance was 6500k but used to clear credit card)
Credit Union 100 per month (Balance 1200)
Online savings account 100 per month (Balance 400 - balance was 800 but used to pay car tax and mobile phone) 

Do you have a pension scheme? Yes, employer pension

Do you own any investment or other property? No assets other than car

Ages of children: No children

Life insurance: none

Other costs:
Petrol: 100 average per month
Mobile: 100 average per month
Social: 200-300, although could easily spend that amount in one night
Grocery: 120 per month
Gym: 30 per month

*What specific question do you have or what issues are of concern to you? *
Following a number of paycuts\ reduction in working hours I have found myself struggling to meet my outstanding loans and have any money left over at the end of the month.

I am in the very fortunate position to live rent-free in a family
owned accomodation and have no utility bills to pay other than a mobile phone and food\social life\car. I have cut back (compared to previous years) on nights out\cinema\eating out. Despite this I struggle to clear the loans. 

A few weeks ago I went through my actual finances and realised I would never be able to afford my own place or even the associated costs.

I am a member of my company credit union and they have a budget plan that I considered joining but as my outgoings exceed what I earn I'm not sure if this will work.

Any advice of restructuring the loans or pointers in the right direction would be really appreciated, I've tried to give as much info as possible. Thanks in advance for any suggestions or input you may have.


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## Brendan Burgess (30 Jul 2010)

I am not sure that there is a huge amount of restructuring to be done.

You need help with cutting your spending so that your spending is less than your earning.You have to be even more brutal about it.


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## dmos87 (30 Jul 2010)

Hi Smashed,

You are very fortunate in most ways and all you need is restructuring and a mind-shift. Its not going to be easy or nice but its needed  

Lets base your salary at 1700 p/m, the lower end. Anything additional is to go towards the CC - the interest on that is through the roof!! Cut it up now - and I mean that, you need to get serious here. the 600 euros in PIP, the 400 euros in online savings and the 1200 euros in the CU - merge the three of them and pay it off on the CC - NOW! It will lower the repayments on the CC. Also contact the CC provider and ask them to freeze the interest for you - there is no harm in asking (at worst they will say no) and it gives you some breathing space to clear the card. 

Luckily for you there is no cost for rent or household bills - this is really great for you BUT I would be aiming to save the amount you WOULD spend if you had to pay these bills. No bank will look at you seriously for a mortgage if you cant do this. 

Your loans have a total outgoing of €823 per month. *Are these all monthly payments or weekly? Do you get paid monthly or weekly?* 

From what I can see, Personal loan 1 listed will be finished in approx 10 payments. Is that correct? Personal loan 2 has approx 2 years left so focus on PL1 mostly. *Are these all fixed term loans or variable?*

Your social life. Sorry love but this is going to go down considerably. It sucks, don't I know it (I'm 23) but it needs to be done. Nights out don't have to be expensive at all! Usually I would drive on a night out but if I decide to drink, I stop off at an off-license for maybe a small bottle of Vodka and cokes or something, and all us girls would meet in someones house for a pow-wow and drinks before we head out. Another reason we do this is because the cost of a taxi is divided down for both the trip in and the trip home. We would then only purchase a small amount of drinks in the club/pub, cutting the cost down completely. Spending 300 euros on a night out is *RIDICULOUS* and you cannot afford to do it. We often have girly meet-ups in someones home for a night in instead and its just as much fun.

your phone - are you Pay as you Go? billpay? Please provide details. There is bound to be a better plan out there for you. I top up 20 euros per month and get free texts - I'm more of a texter.

Petrol and car - do you really need a car for work, etc? Can you get by with public transport or downgrading the car? 

The reason I broach this with you is because at 27 years old you have accumulated a total debt of €36,000. If your entire salary was to go on clearing this debt it would take 21 months - thats almost 2 years. There have been cutbacks in salary and hours and the next step they will take is job cuts. If you loose your job you are in a lot of trouble. Selling the car and purchasing a beat up 10 year old car will free up funds to clear this debt while also lowering petrol, insurance and tax costs. 

Come back to us on the above questions and we'll see what more we can help you with. If you want anymore tips PM me - I've been there as well but not with as much debt - once you get your mind round to it its not that hard.


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## niceoneted (30 Jul 2010)

Agree with all that DMOS87 says, 
Phone is ridiculous amount for a start. 
Car has to go to help clear CC. 
If you have no luck with the bank on freezing the balance as is try switching it to 0% balance transfer one, even if they will only take part of the balance. CUT THE CARD UP NOW.
Stop saving use the 300 to put towards the CC. I suspect the 1200 in the CU is tied in against a loan. 
Perhaps work out how much you need for tax ins for the car and break it down over the year and put this by. 
SOCIAL LIFE HAS to be cut back or the spending in relation to it.
Use the one4All vouchers to buy your clothes, presents, even try selling some of them at a discount to bring in cash. I think you might be able to use them in dunnes so use them for shopping.


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