Money trouble

Mana · 27 Jan 2007 at 10:22

judging my your signature and your post i think u have delusions of grandeur...

PinkPig · 27 Jan 2007 at 10:36

I'd be very careful of going to a random company that's advertised on TV - many of them will just try and charge you enormous amounts for "helping you out of debt" and make the problem worse....

csmager · 27 Jan 2007 at 10:54

phykell said:
The only loan anyone should ever have is one on property and yes, I'm including cars. If you need credit at all, for anything, it means you can't afford it. Save up until you can, it's that simple.

Very sound advice. Certainly something I'm aiming to stick to!

ArmyofHarmony · 27 Jan 2007 at 10:59

csmager said:
Very sound advice. Certainly something I'm aiming to stick to!

and student loan of course

PinkPig · 27 Jan 2007 at 12:31

If one of your other posts very recently you said something like "remind me how £200 is a lot of money?" - which is exactly what you need to change. Realise the value of money - £200 is easily enough for food and general expenditure for well over a month - and your problem is solved.

Don't feel like I'm criticising you too much - I know only too well how easy it is to get carried away - but you need to go cold turkey on all the spending. Decide what you really need (by the sounds of it the car is a luxury rather than a necessity for you, if you can go to work by train and haven't passed your test then it's completely unneeded)

Tru · 27 Jan 2007 at 12:48

10K @ 6.9% is chicken feed, there's no need to panic. You have a temporary cash flow problem that's all. Cut out the curries and do some over time, problem solved.

robmiller · 27 Jan 2007 at 13:10

phykell said:
The only loan anyone should ever have is one on property and yes, I'm including cars. If you need credit at all, for anything, it means you can't afford it. Save up until you can, it's that simple.

That doesn't really apply to a lot of people, to be fair. Lots of people can manage credit perfectly fine, I know my mum's had a couple of small loans that she paid off in full and on time and isn't the worse for it at all.

Perhaps you should modify it to: "if you're a complete moron about money, never get any kind of loan ever ever ever ever."

Scuzi · 27 Jan 2007 at 13:43

phykell said:
The only loan anyone should ever have is one on property and yes, I'm including cars. If you need credit at all, for anything, it means you can't afford it. Save up until you can, it's that simple.

I disagree, unless you are completely unable to manage credit, there is such a thing as healthy credit. Take a £10k car for example. If I had £10k in my bank account, I wouldn't go and spend it on the car, I'd much rather take a £10k loan out at a low rate, or pay £5k from my saving and put the other £5k on credit. It's much more flexible and convenient to have a nice lump sum in your savings should you ever need it for mitigating circumstances. Yes, technically I will pay more for taking a loan out due to interest but provided the rate is correct, that small amount extra is worth it for the convenience.
A mortgage isn't any different to any other healthy and well managed credit.

However, if you're incapable of managing credit like some people, the OP for example, then yes, you really should try to avoid it at all costs (pardon the pun).

cleanbluesky · 27 Jan 2007 at 13:48

Scuzi said:
I disagree, unless you are completely unable to manage credit, there is such a thing as healthy credit. Take a £10k car for example. If I had £10k in my bank account, I wouldn't go and spend it on the car, I'd much rather take a £10k loan out at a low rate, or pay £5k from my saving and put the other £5k on credit. It's much more flexible and convenient to have a nice lump sum in your savings should you ever need it for mitigating circumstances. Yes, technically I will pay more for taking a loan out due to interest but provided the rate is correct, that small amount extra is worth it for the convenience.
A mortgage isn't any different to any other healthy and well managed credit.

However, if you're incapable of managing credit like some people, the OP for example, then yes, you really should try to avoid it at all costs (pardon the pun).

Under phykell's philosophy you still cant afford it, particularly when you could purchase a £5k car instead outright and still have a bunce left over.

The only exception I have found to this would be loans for education or training - since these represent an investment in earning potential. Still risky though, as many things are... but it is better to risk failure than to never try at all. Unless the illusion of having control over failure is too much of an emtional draw of course, that way its just best to sit under a rock.

Scuzi · 27 Jan 2007 at 13:58

cleanbluesky said:
Under phykell's philosophy you still cant afford it, particularly when you could purchase a £5k car instead outright and still have a bunce left over.

That's why I don't work to his philosophy and my finances are in a perfectly healthy order. If I want a £10k car, I'll buy a £10k car, provided I can afford the finance comfortably and have enough of a backup fund should I need to pay it off for whatever reason.

Killa_ken · 27 Jan 2007 at 15:06

18k

thats a year and a half tuition :eek:

You MUST have something to show for that?

dirtydog · 27 Jan 2007 at 17:24

cleanbluesky said:
Under phykell's philosophy you still cant afford it, particularly when you could purchase a £5k car instead outright and still have a bunce left over.

That's what someone sensible would do anyway. Having a loan while having savings makes no sense whatsoever. I can see the argument in favour of borrowing in order to fund your education, because it is an investment in yourself which you would anticipate more than paying for itself. Borrowing to purchase a car (which is more expensive than you need) however, does not fall into that category.

Aruffell · 28 Jan 2007 at 10:54

oneilldo said:
I don't think he was being serious about the carol vorderman loans at least I hope not with < 10k debt a lot better and cheaper options are available like 0% creditcards etc.

To the OP - just start putting as much as you can in another account each month, don't buy anything you don't need and then when you are sure you can pay bills etc without the need for the money you are putting in the 2nd account, you can make overpayments on your loan.

I also agree with above in that the only loan you should really get is for something that is appreciating, which a car 99%* of times isn't but a home 90%* of time is (over the long term).

I bought a punto GT for £650 3 years ago and its gone through all MOT's with just brakes etc need doing. However the turbo has gone now so I will just run it into the ground as its not worth getting the turbo replaced (the HG also needs doing). If your doing 130 miles per week then 2.3k for a car isn't too bad but you should really be passing your test soon. I take it the car is insured by your mum so when you pass the costs for insurance will rise (espiecially if you have modifications).

* = figures plucked out of ones behind.

Nop, insurance is paid by me under my name, my mum is a named driver. I pay £1200 fully comp with modifications on a 1.4 sport, i paid it off in one lump sum. Also had my tax and mot done recently, and full service.

Andy

PinkPig · 28 Jan 2007 at 10:59

Aruffell said:
Nop, insurance is paid by me under my name, my mum is a named driver. I pay £1200 fully comp with modifications on a 1.4 sport, i paid it off in one lump sum. Also had my tax and mot done recently, and full service.

Andy

And you see where the money's going? Why did you even buy a car when you don't need it for anything in particular? By the sounds, just because you could.

phykell · 28 Jan 2007 at 11:46

robmiller said:
That doesn't really apply to a lot of people, to be fair. Lots of people can manage credit perfectly fine, I know my mum's had a couple of small loans that she paid off in full and on time and isn't the worse for it at all.

Perhaps you should modify it to: "if you're a complete moron about money, never get any kind of loan ever ever ever ever."

It applies to everyone without exception. I wasn't saying that people can't pay off loans, I'm saying that having to take out a loan for an item means you can't afford it. Let me very clear on that point, there is a difference between being able to afford something and being able to afford the payments on a loan over a given period of time.

Regarding the example of your mother, assuming she had to take out those small loans, it means she couldn't afford the product/service. Of course she might regard credit as a useful and effective method of spreading out payments and for many people that works out fine as you say

Bottom line is that people shouldn't look at their credit card limit as some sort of extension to their ability to pay because it *isn't*. Your ability to pay is the amount of money you *have* not what you expect to have over time. All you're doing is robbing your future to pay your present. Sounds like folly to me.

KNiVES · 28 Jan 2007 at 11:52

My only advice is that once you've finally sorted your payments out, just be careful and remember this next time you feel the urge to splash out

Credit card companies can really get ugly if the worst comes to the worst. Good luck mate.

phykell · 28 Jan 2007 at 11:58

Scuzi said:
I disagree, unless you are completely unable to manage credit, there is such a thing as healthy credit. Take a £10k car for example. If I had £10k in my bank account, I wouldn't go and spend it on the car, I'd much rather take a £10k loan out at a low rate, or pay £5k from my saving and put the other £5k on credit. It's much more flexible and convenient to have a nice lump sum in your savings should you ever need it for mitigating circumstances. Yes, technically I will pay more for taking a loan out due to interest but provided the rate is correct, that small amount extra is worth it for the convenience.
A mortgage isn't any different to any other healthy and well managed credit.

However, if you're incapable of managing credit like some people, the OP for example, then yes, you really should try to avoid it at all costs (pardon the pun).

Buy a 5K car and start saving for the 10K one. While you're waiting for the latter, you're driving the former and saving money. Simple. Or is it that you simply *must* have a 10K car rather than a 5K one? If so, isn't that the problem right there?

Morba · 28 Jan 2007 at 12:00

phykell said:
Buy a 5K car and start saving for the 10K one. While you're waiting for the latter, you're driving the former and saving money. Simple. Or is it that you simply *must* have a 10K car rather than a 5K one? If so, isn't that the problem right there?

saving money? the 5k car will depreciate more, taking longer to save for the 10k one.

Fuzz · 28 Jan 2007 at 13:12

Gotta laugh at Aruffell trying to justify his purchases on page 3..
However, I'm not here to be cruel.
Just to point out that you obviously cant see the wood from the trees in relation to what you NEED to live against what you WANT!!
Once you have got over that hurdle it gets a lot easier.

I'm probably no different, I thought could manage the debt I have but after returning from holiday after Christmas I was in for a wake up call, with about ten bills on the doormat needing paying within the next few weeks..
Of course coming back off holiday the bank account is dry and no money from work will be forthcoming for a week or so yet!!

When you have over 22k of debt hanging over your head and no way to pay it, it's probably time to start worrying !

(or selling stuff

)

Dam lunch is getting cold now so i'll come back to this later. :cool:

Andy