Wealth Check: The warning signs are going off everywhere

Carly Sugarman graduated from the University of Leeds in 2004. Plans to live with her parents and save monthly for travelling have since given way to having fun and a considerable shopping habit. She recently sold her car and used the money to clear her student overdraft. The remainder has been put into an ISA.

She hopes to pursue a career in London but is concerned she would be unable to afford the living costs on a starting salary. Carly aims to pay off her credit card and loans within the next five years but would like advice on how to do this.

We asked three independent financial advisers for their help: Susan Hannums of Chase de Vere, Chris Holmes of Harrington Brooks and Philippa Gee of Torquil Clark.

Case notes

Carly Sugarman, 22, Manchester

Personal: Carly works as an ssistant manager of a shoe shop. Her annual salary is around £12,660 after tax, which gives her just over £1,000 of disposable income each month.

Property: Recently moved out of her parents' home into a rented (£400 a month) shared city centre flat. She would like to buy her own property within two years, but has yet to start making significant savings for a deposit.

Savings: £750 in a NatWest individual savings account.

Monthly spending: Living expenses £615; bank loan £98; credit card £46; entertainment and clothes £300; student loan according to monthly earnings and inflation.

Pension: Carly has yet to start saving for retirement but does not feel able to open a pension.

DEBT

"The warning signs are going off everywhere with Carly," says Hannums. "She's having fun - and why shouldn't she at her age? - but her need to assess her situation couldn't come at a better time."

Carly is spending £300 a month more than she is earning and so is only adding to her debt. All three advisers recommend that Carly concentrates on her budgeting skills. Gee fears that if she carries on as she is the debt will cripple her.

Gee recommends a two-fold plan, including calculating a weekly spend. "First you need to identify exactly where you are with your finances, and look at ways of cutting costs such as mobile phone and utility bills," she says. "Second, you need an immediate plan to boost your earnings, moving up the career ladder."

SAVINGS

Gee also advises that the interest rate Carly is paying on her debt will be higher than that which she gains from her ISA. Therefore, she is actually losing out each month by keeping the money in an ISA.

Holmes agrees that a new financial regime is necessary. Carly must not take on more credit, must keep up to date on payments and cut her spending.

PROPERTY

Holmes suggests that moving back home, alongside cut-backs in other areas, would release up to £725 to put towards saving for a deposit on a property, debt reduction on the credit card and loan, and even some rainy-day money.

Hannums advises that by saving on her £400 rent, Carly could pay off her credit card in six months, as opposed to the 17 years it will take if she continues paying the minimum. "Done correctly she won't have to give up shoe shopping," says Hannums. "Carry on like this and she'll be the woman who lived in her shoes."

For a free financial check up, write to Wealth Check, The Independent, 191 Marsh Wall, London E14 9RS or email cash@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsSchool leaver's YouTube video features staging of a playground gun massacre
Travel
travel
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Morrissey pictured in 2013
people
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
News
Robyn Lawley
people
News
people
News
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
News
people
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    1st Line Support Technician / Application Support

    £20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

    Team Secretary - (Client Development/Sales Team) - Wimbledon

    £28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

    Accountant / Assistant Management Accountant

    Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

    Senior Investment Accounting Change Manager

    £600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

    Day In a Page

    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices
    Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

    Could smartphones soon be diagnosing diseases?

    Health Kit and Google Fit have been described as "the beginning of a health revolution"
    Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

    Can we learn to love Ryanair again?

    Four recent travellers give their verdicts on the carrier's improved customer service
    Billionaire founder of Spanx launches range of jeans that offers

    Spanx launches range of jeans

    The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
    10 best over-ear headphones

    Aural pleasure: 10 best over-ear headphones

    Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
    Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

    Commonwealth Games

    David Millar ready to serve up gold for his beloved Scotland in the end
    UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

    UCI Mountain Bike World Cup

    Downhill all the way to the top for the Atherton siblings
    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain