what shall i do?

[buggi]

At the moment, staying at my mum's coz i got in a bit of a mess with my credit cards. i'm renting my flat out for a year to get myself straight.

Thing is, when i had a debt company come out and they did my finances, my disposable income is only actually about £10 per month. so basically taking into account £30 a week for, (what i'm allowed by law) and my petrol allowance, that's all i've got left after bills, so not surprising that i've got a lot on credit cards. The £10 a month is what i have left for leisure (doesn't even pay for cinema ticket!) My flat is in negative equity so they told me either 7 years to pay it off (opting out of my pension to find the surplus funds) or bankruptcy (which is the better option in their opinion as i wouldn't lose the flat bcoz it's not worth taking it). my mum and dad decided it would be better if i came home, as they didn't want my pension wrecked, and rented my flat and paid off my debts in a year.

but i feel a bit like i'm just going to go back and, because of the lack of disposable income, i'm just going to either start accumulating debt again, or basically vegetate in a one bedroomed flat, never going out and never meeting anyone. I'm finding the whole situation a little bit depressing. There is so much i want to do, i've had some shoot relationship where i've come out with nothing and spent the time with those blokes doing what they wanted, not what i wanted.

i want to travel the world a bit, go to Alaska, Yellowstone and New Zealand and do stuff i wouldnt normally do, but i'm already nearly 39 and i feel like my opportunities are slipping away.

Would it be such a bad move if, once i've paid off my debts, i just get rid of the flat (once it's back in equity) rent a room instead (which would be half the price of my mortgage) and then spend all my spare cash having an exciting time instead. I get an amazing 33 days holiday a year and if i cleverly work them around bank hols etc, i feel like i could go and do all the things i want to do. i'm not sure i want to spend the next 20 years struggling on my own and waiting til i retire to do this stuff. Is it such a big deal to have your own place? or am i an idiot to give it up and will i end up in poverty living somewhere crap when i'm older?

 

[Headgardener]

Hi Buggi sorry to hear that you are in financial trouble and I wish that I could suggest a simple way out. Maybe one of the accountants that post here can help. If you do decide to go on a world tour then do it as soon as you can as it the one thing that I wished I had done when I was younger (I'm 50 and still living at home with my father but that's another story). Good luck with what ever happens.

 

[gary r]

sorry to hear that,you need to get your finances sorted before escaping on a cycle tour,i understand the urge to run away,and you are very lucky to have the support & free roof over your head whilst you get back on your feet.

 

[Moodyman]

Again, sorry about your troubles.

I would encourage you to sort your life out by using your parents offer of help (they're not going to be around forever) and get yourself a decent foundation. Rid yourself of debt, get a little rainy day pot and then start enjoying yourself in moderation (as in within your means).

I notice that you link money with enjoying yourself. Sometimes yes, but most of the time you can enjoy yourself without spending huge amounts of money.

A walk in the park, bike ride with a friends costs nothing. You don't have to do cinemas, pubs or fancy bars. Look at an alternative lifestyle.

Tell yourself that you will only spend what you own. Credit Card money is not yours.

 

[Globalti]

I take it you've cut up the credit cards?

Your life is going nowhere, that's why you're feeling so depressed.

Your parents are right to want to safeguard your pension.

You are at a crossroad in your life, you can turn one way and carry on vegetating or turn the other and change everything. Go and work in Africa for a year, it will teach you how to get by on next to nothing and make your realise that you're actually incredibly wealthy compared with 90% of the population, you will make some fantastic friends and have a ball socialising with genuine people rather than wasting money. The whole world is out there, desperate for people like you, you've no ties, you're free, go now before it's too late.

 

[montage]

Can't offer any advice, but I hope it works out for you Buggi

 

[Arch]

Is it such a big deal to have your own place? or am i an idiot to give it up and will i end up in poverty living somewhere crap when i'm older?

No. I rent, and I see no prospect of ever owning a house, unless you counting inheriting a share in my Mum's, and that assumes that she doesn't eventually need care that swallows up the house value - as far as I'm concerned, it's her house, and if she needs the money, she needs it.

Anyway... Like I said, I rent. It's a bedsit, but a nice one, in a nice location. I can afford it, and the bills, and have a little left over to play with. I don't earn much, but then I'm not in a stressful job with lots of responsibility, which suits me. I'm paying back some money my Mum lent me, once that's done (at the end of the year more or less), I'll have a bit more to play with.

And I don't even have a pension! You know what? I don't think about it. Maybe that's irresponsible, but it's only me I have to think about, no partner or dependents. I'm 40 now, and thinking I'd like to take some time off one day and cycle round Europe. It's never too late.

Over on the continent, owning is much less common, apparently, and renting is the norm. So, go for a continental lifestyle.

Also, it's worth thinking about all the little economies you can make to allow you a bit more spending money - look at your shopping habits and so on. There's a saying - Look after the pennies, the pounds will take care of themselves. As Moodyman said, having fun doesn't have to cost a lot.

You've got one big asset - your family, who obviously care about you - that's not something everyone has. So, get things straight, and reassess what you want from life, maybe sell up, take a trip, and come back a new person to a new lifestyle. You've taken the worst step - admitting there's anything wrong.

All the best, whatever you do.

 

[Dayvo]

I agree with everything Arch said!

EXCEPT the bit about her mum's money!

If you can get your hands on it, DO SO!

 

[Gromit]

Renting out the flat in order to pay off your debts is a good idea. Pay off the largest debt you can first using the snowballing effect leaving the smallest one.

http://www.skeptics.org.uk/article.php?dir=articles&article=debt_reduction_and_snowballing.php

Cut up the credit cards believe me they are no good.

Keep the flat after you have paid off all the debt, however still rent it out, that way you will always have an income if you decide to travel.

You could get a second job to generate a bit more income, maybe work in your local pub, that way you could meet some new people.

There is a way out of it.

 

[rich p]

I agree with everything Arch said!

EXCEPT the bit about her mum's money!

If you can get your hands on it, DO SO!

My advice to you, Dayvo, is rent boy

 

[Dayvo]

My advice to you, Dayvo, is rent boy

Is your money all Thai-ed up, Rich? Invested in the lady boyos?

 

[MacB]

Buggi, first things first, the finances, I don't know who you're using/consolidating via but I would recommend the CCCS(consumer credit counselling service). Usual stuff, they go through your budget, agree with you what you can pay and then contact your creditiors. You make your payment to the CCCS and they pass it on. They make NO CHARGES but rely on donations and the interest earned in the 3 weeks between getting your money and paying it back out again. If it hasn't already been done they should also be able to freeze the interest on all of your personal debts. They are very well respected and most companies will accept their terms. Any company that doesn't faces a rather hard time from the courts if they take further action.

I would imagine that they are pretty busy at present but they are who I've always recommended people go to.

 

[TVC]

Sorry to hear of your troubles Buggi. I'm afraid the only way to deal with this is to face it square on. Do everything you can to get rid of the debt as soon as possible. Gromit suggested a second job which would help a lot, do you get paid overtime with the place you're at, if so throw yourself at all that is available, what about a promotion?. The job market is loosening up so is it possible to move onto a better paid position.
You have to raise as much cash as you can, so what can you sell? any vinyl, collectables (I hate to suggest it - spare bikes). Clearly you have a car, will a smaller/older one do just for a couple of years? or could you get by with a moped - just for a while.

Be strong and treat it as a battle to be won. The prize is getting the life you want back.

 

[Crankarm]

If you are working so have an income how are you managing to spend all your earnings? You should be looking at reducing your outgoings and debts not accumulating them which means drastically cutting back expenditure and concentrating on generating income. Embarking on a long cycling tour will only cost more money unless you can think of a way to make it self financing? Sell your body perhaps ? If you are looking bankruptcy in the face then your debts must considerably outstrip any assets you might have. If you have equity in your flat then it may be time to sell this and release the equity or alternatively rent it out, cover any mortgage with the rent and keep the balance to supplement your income. If rental won't cover the mortgage you're f****d and should sell it. Bear in mind if you rent the flat your lender might well want a higher rate of interest on any mortgage you are currently paying. I would only embark on a long cycle tour with a reasonable amount of cash in the bank which sounds like this is not the case for you. Also going on a long cycle tour without resolving your financial difficulties is only running away and you will have to address them sooner or later when you might not have a choice as one of your creditors makes you bankrupt or your lender re-possesses your flat and pursues you for any shortfall.

It sounds like your job with 33 days holiday is the only positive thing in your life at the moment. If you have accumulated 20 years in a final salary pension scheme and 40 years old then STAY THERE!! To jeopardise this would be foolish. Live with your folks for a year or two, save everything you absolutely can, don't spend anything and save £15k. Shouldn't be too hard if saving £15k would get you out of the brown stuff. Pay off your debts and then make some Additional Voluntary Contributions (AVCs) to your pension so when you come to the possibility of early retirement you can take it and an increased pot and annual pension.

Without having sight of your income, outgoings, assets and liabilities to draw up a simple balance sheet it is difficult to fully advise.

 

[brokenbetty]

Hi buggi

First thing is that it only looks like you are going nowhere because you are in the middle of it. In a few years you will be in a much better place and you'll see that this time was part of the process of getting there.

Second thing is that I'm almost the same age as you, and whenever I feel like I'm too old to do something I want to do, I think whether the 10-year-older me would look back and think "yeah, I was too old for that, I'm glad I didn't do it". Do you think the 49-year old you is going to agree that the 39-year old you was too old to travel? I don't.

Third thing is that I really recommend the Motley Fool Dealing with Debt forum: http://boards.fool.co.uk/dealing-with-debt-50079.aspx?mid=11926442&sort=collapsed for advice for people getting out of debt. The regulars there won't pull any punches but they will give you good advice.

Good luck