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; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Finacial products from our partners
Property search
  • Get to the point
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

    Recruitment Genius: Claims Administrator

    £16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

    Recruitment Genius: Senior SEO Executive

    £24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

    Recruitment Genius: Online Customer Service Administrator

    £16000 - £18000 per annum: Recruitment Genius: An Online customer Service Admi...

    Recruitment Genius: Digital Marketing Executive

    £18000 - £22000 per annum: Recruitment Genius: This global, industry leading, ...

    Day In a Page

    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

    Everyone is talking about The Trews

    Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before
    'Queer saint' Peter Watson left his mark on British culture by bankrolling artworld giants

    'Queer saint' who bankrolled artworld giants

    British culture owes a huge debt to Peter Watson, says Michael Prodger
    Pushkin Prizes: Unusual exchange programme aims to bring countries together through culture

    Pushkin Prizes brings countries together

    Ten Scottish schoolchildren and their Russian peers attended a creative writing workshop in the Highlands this week
    14 best kids' hoodies

    14 best kids' hoodies

    Don't get caught out by that wind on the beach. Zip them up in a lightweight top to see them through summer to autumn
    Robert Fisk in Abu Dhabi: The acceptable face of the Emirates

    The acceptable face of the Emirates

    Has Abu Dhabi found a way to blend petrodollars with principles, asks Robert Fisk