Rebecca Weymouth, 27, has a good job in media sales working for a magazine publisher in London. But sales is a cut-throat industry that doesn't pay large salaries and Rebecca is finding it difficult to cope with the cost of living in the capital.
She has repeatedly embarked on budgeting drives but despite a frugal lifestyle, one-off demands on her purse have often blown her off course and her debt keeps increasing. She did have savings of £3,000 but this has dwindled to just £150 and she is making no contributions to a pension.
Rebecca wants advice on how to put her finances in order without taking on a second job, which seems the only option. We asked three independent financial advisers to help: Susan Hannums of Chase de Vere, Philippa Gee of Torquil Clark and Andrew Swallow of Swallow Financial Management.
Rebecca Weymouth, 27, media sales London
Salary: A little over £20,000 depending on commission. After tax, this works at out at around £1,250 a month.
Monthly spending: £700 on rent, bills and travel, £500 on other costs such as debt repayments. A total of £1,200 a month not including one-off costs such as holidays, birthdays or emergencies.
Savings: £150 in a cash individual savings account.
Debts: Personal loan of £8,000, credit card debt of £5,000, overdraft of £1,500, plus student loans of £7,000.
Pension: An occupational scheme is available at work but for now Rebecca does not feel she can spare the money to contribute to it. No other retirement savings.
Susan Hannums urges Rebecca not to panic - simply by facing up to her financial problems, she is heading in the right direction. Hannums thinks Rebecca needs to go back to the drawing board. On a spreadsheet, she needs to write down every conceivable expense over the course of a year, and subtract it from her net income before dividing it by 12 to give monthly disposable income.
Philippa Gee also has budgeting advice. She suggests Rebecca trawls through her bank statements to identify any spending on which she could cut back - gym membership fees, for example. She also wants Rebecca to note down the details of every bit of spending over the next fortnight, so she can get a good picture of where her money is actually going.
Both Gee and Hannums think there will be scope for Rebecca to reduce her outgoings - by switching to a cheaper mobile phone deal, for example, or by taking packed lunches to work. Gee recommends www.moneysavingexpert.com as an excellent source of good deals and money-saving tips.
Andrew Swallow says that while he understands Rebecca's desire to save more, there's no point until she has reduced her debts. The cost of interest on money owed outweighs the interest earned on savings.
Gee says the arrangements Rebecca has made with her debts suggest she is capable of being financially savvy. Her credit card debt is on a 0 per cent deal, so interest charges are not mounting up, and her loan, at 6.9 per cent a year, is pretty competitive too. Student loans are also more affordable, because the rate of interest is pegged to inflation.
Hannums says the one opportunity for improvement is Rebecca's bank account, though people often don't realise they can change bank even when they're overdrawn. She recommends Alliance & Leicester, which offers an interest-free overdraft for 12 months.
THE RADICAL OPTION
If better budgeting and debt management don't help Rebecca get back in control - and they will take some time to work - our advisers suggest some life-changing alternatives.
Swallow says that Rebecca needs to have a serious think about her job - whether she is happy doing it and whether its earnings potential is sufficiently attractive. He suggests her qualifications might enable her to get better-paid work.
Gee thinks Rebecca should consider moving out of London, even back to the parental home, in order to give her finances a rest.
All the advisers think Rebecca should concentrate on debt repayments to the exclusion of savings for now. But the exception to this rule is a pension. Hannums says Rebecca could spare £20 a month - if this isn't enough for her employer's scheme, she could open a low-cost stakeholder pension with a life insurer. Any contributions she can make will attract tax relief.
For a free financial check-up, write to Wealth Check, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail firstname.lastname@example.org