BUYING her own home is Stacey Gould’s dream but with £5,000 of debt and an individual voluntary agreement (IVA) she doesn't know if she will get accepted for a mortgage.
The 33-year-old recruitment partner earns an annual salary of £34,670 - or £2,259 a month - and has recently moved into a rented one-bed cottage in Leeds.
But she's desperate to get debt-free and step onto the property ladder.
Our Cash Clinic expert Rebecca Goodman doesn't pull any punches - she tells Stacey to stop frittering £250 a month on new clothes, going out and shopping, and to instead put this cash towards clearing her debts sooner.
Rebecca also boosts Stacey's income by recommending she switch some of her household bills, which means she can start saving for that all important deposit.
She also recommends Stacey starts keeping an eye on her credit file and makes in-roads in boosting her score.
Stacey told The Sun: “I struggle to manage my money and feel like I’m living paycheck to paycheck.
"I also really want to feel more financially stable and in control of my finances.
I feel like I'm living pay check to pay checkStacey Gould
“I’m really worried about my debt and being 33 and not on the property ladder.
“I want to be debt free and start saving for a house. I would also like to get to the end of the month with some money.”
Stacey is also worried that the IVA - which was set up to pay off existing debts - will hold her back when it comes to buying a house.
Here’s what our Cash Clinic expert recommends.
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For some, it's easy to get caught up with work and family life and to put our own finances on the back burner.
While for others, it needs an expert's eye to work out where further cutbacks can be made to already tight budgets.
Clothes: £100 per month
New spend: £20 per month
Saving: £80 per month
Stacey admits her clothing budget “could definitely be cut considerably”. “I don’t really need to spend so much as I have a pretty full wardrobe as it is,” she said.
By cutting her annual clothing budget, she could save £960 in a year, which is a decent amount to put into her savings.
This will be an adjustment but right now it’s a small sacrifice if she wants to get on the property ladder.
There are lots of ways to cut costs when buying clothes. These include using cashback websites such as TopCashback to earn money when buying through the website.
In addition, Stacey could boost her savings by selling unwanted clothes. There are lots of free places to do this, including Facebook Marketplace and Gumtree.
Bills: £364 per month
New spend: £331 per month
Saving: £33 per month
Stacey has recently moved home and the current energy provider is Npower, on a £60 per month dual fuel tariff.
Switching to a different provider, which is free and quick to do online, could save her £15 a month.
A quick search on comparison website MoneySuperMarket reveals cheaper tariffs with Eon and British Gas for £44 and £45 per month respectively, or if she wanted a green provider Green Network Energy has a tariff for £45.
This is up to £16 a month cheaper, or £192 per year.
Broadband and line rental with TalkTalk costs £20, while TV with Sky is £34, and Stacey’s mobile contract with EE is £32 a month.
Stacey is within the minimum contract term for all of these household bills so she's unable to switch without paying hefty exit fees.
When the contracts are up for renewal, she should check for cheaper deals by punching her postcode into BroadbandChoices.co.uk, which compares broadband, TV, and mobile deals.
Stacey doesn’t currently have contents insurance, and we would strongly recommend her buying a contents policy as soon as possible to protect her belongings.
As she doesn’t have any savings, if her home was to get burgled or damaged from something such as a flood, this could put her in a nasty position financially as she’d have to replace everything.
A quick search on comparison website Gocompare.co.uk shows deals from £47 a year with Admiral.
This is a basic policy which requires a £100 excess when claiming and covers £10,000 worth of contents.
For full protection, it’s well worth adding accidental damage to cover for all eventualities, as well as personal possessions cover - to cover belongings when they’re taken out of the home.
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Council tax is £114 a month which includes a single person’s discount.
Stacey pays £5.99 for Amazon Prime, £12 for a TV licence, and £28 a month for water.
By having a water meter installed, Stacey could save £8 a month, or £96 a year, according to the Consumer Council for Water’s free online calculator.
It’s free to have one installed by her water provider - although she will need to ask her landlord's permission - and if she decides she no longer wants it, it can also be taken out at no cost.
As a member of her Virgin Active gym, Stacey pays £45 per month.
But she says she uses the gym, classes, and the spa facilities a lot and believes she gets value for money out of the membership.
In addition, Stacey pays £163 a year for membership to The Chartered Institute of Personnel and Development (CIPD).
But Stacey says her employer may be able to pay her CIPD membership, saving her £163 a year.
Entertainment: £150 per month
New spend: £100 per month
Saving: £50 per month
Stacey spends around £100 a month on nights out socialising with friends.
As her main goal now is saving for her first home, this is an area she can cut back on.
Stacey needs to prioritise if she wants to buy her own home and cut back on nights outCash Clinic
Instead of going out, having friends over to her new house and taking it in turns to host, is a good way to cut costs while still having a social life.
Stacey also spends around £50 a month on takeaways but cutting this down or out completely could boost her monthly cash.
Cooking your own meals and fakeaways - and making meals with friends - is a great way to cut costs.
Groceries: £160 per month
New spend: £150 per month
Savings: £10 per month
Stacey spends between £30 and £40 on food every week and shops at Aldi and Tesco.
If she was to move entirely over to Aldi then should should be able to cut her bills.
For example, we looked at eight items on Stacey's shopping bill and found that six of them were cheaper at Aldi (chicken, bacon, eggs, coffee, minced beef, and mince turkey) and one item (milk) was the same price.
On these six items alone, Stacey would save £1.85 shopping at Aldi. We checked this on comparison tool MySupermarket so it's worth Stacey doing the same before she heads out for a shop.
She should also try and buy her fruit and veg in Aldi's weekly cut-price "Super Six" promotion.
If she does stick with Tesco then she should at least swap big name brands for own-brands.
For example, a box of 12 x 27g sachets of Quakers Oat So Simple Porridge costs £2.75 at Tesco, while a 1kg bag of Tesco Scottish Oats costs £1.10.
We estimate this could save Stacey £10 a month doing this, boosting her annual savings by £120.
Housing: £600 per month
New spend: £600 per month
Saving: £0 per month
Stacey has recently moved into a new home in Leeds and she rents this as a private tenant for £600 a month.
She’s locked into a contract here so this figure is unlikely to change. But if the rent does rise, she’s free to move out or she could also negotiate the price with her landlord.
In order to do this, she should find out what other properties like hers are being rented out for and send examples to the landlord.
Debts: £574 per month
New spend: £574 per month
Saving: £1,749 over lifetime of debts
In July last year, Stacey bought a new car, a Peugeot 208, with a five-year finance deal paying £120 a month at a rate of 5.6 per cent.
Once the contract ends in 2024 she will own the car outright.
Stacey also has an individual voluntary arrangement (IVA) in place, paying off £354 a month.
There is £4,200 outstanding on the debt and she is due to have paid it off by December this year.
Stacey took out the IVA in 2015 after struggling to repay spiralling debts on credit cards, payday loans and catalogue accounts.
Looking back she says she realises how "stupid" she was to rack up the debts so quickly.
At the time, her original debt was around £9,000 and she used a debt management company to sort out the IVA costing her £400 on top.
You will almost always have to pay a fee for setting up an IVA, even if you go via a charity, but unlike private firms charities won't charge commission and they will offer free independent advice.
Stacey also has £950 in debt across two credit cards. She pays the minimum monthly repayment amount on each card.
This is divided between a Halifax credit card with £500 worth of debt, charged at 27.9 per cent, and £450 on an Aqua card at 35.9 per cent.
While the overall amount isn't huge, the interest rates Stacey is paying are high, and because she’s only making the minimum payment she is going to end up paying more in interest than the original debt.
For example, with the Halifax card, she pays around £12 a month off as the minimum payment.
But a quick check on a credit card interest rate repayment calculator shows that at this rate it will take her eight years to clear the current debt and she would pay £664 in
If she increased the minimum payment to £50 this could cut the interest charges to £66 over the lifetime of the debt and she could clear the card in a year.
Similarly, paying the minimum £10 on the Aqua card means it will take almost 12 years to clear this card and Stacey will pay a whopping £1,211 in interest.
Upping her repayments can slash how much Stacey pays on debts by thousandsCash Clinic
By increasing the repayments to £60 a month she could clear it in nine months and drop the total interest paid to £89 - a £1,151 saving.
Stacey does usually end up with between £100 to £200 left over each month so she could use this straight away to increase her repayments.
With the suggestions from Cash Clinic her monthly income will rise and this can also be used to clear these cards.
Another option is applying for a 0 per cent balance transfer card.
If she were able to transfer both card debts to a 0 per cent deal this would cut the interest payments completely if she can clear the debt in the interest-free period.
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One of the longest cards available comes from Sainsbury’s with 29 months 0 per cent and a fee to move the debts of 2.75 per cent.
This would cost Stacey £26.13 but before applying it’s worth using a free calculator, such as this one from MoneySavingExpert, to see which cards she is likely to be accepted for. Checking on the tool won't affect her credit score.
Finally, Stacey pays £75 a month to a family member to pay back a loan, which is due to end in June, and she pays £25 a month for a sofa she bought, that's due to end in March.
Motoring: £135 per month
New spend: £135 per month
Saving: £0 per month
Car insurance with RAC costs Stacey £75 a month. She wisely chose a Blackbox policy, which rewards her with a cheaper premiums if she consistently drives in a safe way.
This is a competitive deal and a quick check on comparison website Gocompare.com shows it’s the cheapest she could be on.
She also spends £50 a month on petrol.
Stacey took out a gap insurance policy when she bought the car last year for £9 a month.
If her car is written off or stolen this means her insurer will pay out the money for a brand new car at the same cost as what she paid for it.
Standard car insurance covers this too but usually only at the car’s value at the time of the incident, which is likely to be significantly less than the price paid when it was brand new - unless it's within the first year.
Gap policies aren't compulsory but Stacey does have to give the car back or repay the loan in full when her finance deal ends, so if she can't afford the shortfall it's probably worth keeping the policy.
Stacey is ending up with a little extra cash in her bank account each month. This varies but is generally between £100 and £200 a month.
With Cash Clinics recommendations, this could be increased to £300 to £400.
Instead of leaving this in her current account, by putting it into a savings account Stacey can start earning interest on it.
Interest rates are pretty dismal right now, the highest amount is 2 per cent for a three-year fixed-rate account with UBL Bank, but she’d still earn more than she does now.
There’s also the option of a regular savings account. You can save less into these but the interest rates are higher.
HSBC’s regular saver pays 2.75 per cent and you can put away £250 per month.
First Direct’s account pays the same amount and you can put up to £300 away each month.
Stacey has never switched her current account either, so now is the perfect time.
HSBC pays £175 while First Direct pays £100 to switchers - plus she’ll have access to the regular savings account.
She could pay in a set amount each month to go into the regular savings account and any extra can go into a fixed-rate account.
With either of these she’ll need to set a reminder to let her know when the interest rate lasts until and at this point switch to an account paying a higher amount.
What has Cash Clinic managed to save Stacey?
Stacey can make some real savings by cutting her spending, particularly her clothing and entertainment budget.
Increasing her spending on debt repayments will also equal big savings in the long-run.
What has Cash Clinic saved Stacey?
HERE'S how much our Cash Clinic has saved Stacey:
Total saving: £174 a month/ £2,088 a year or £3,945 once you factr in debt savings on top
Month to month, we've saved Stacey £174 or £2,088 a year.
But once you factor in the extra interest savings made from repaying her debts sooner, Cash Clinic has saved Stacey £3,945 in total during the first year.
This can go straight into her house savings, although in order to buy in Leeds she will need an average deposit of £21,750 for the average £145,000 first-time buyer property, according to portal Zoopla.
Plus extra for moving costs - although first-time buyers don't pay stamp duty on the first £300,000 of the property.
This means saving for around another eight years, although Stacey could research first-time buyer schemes such as the Help to Buy equity loan, the Lifetime Isa, and Shared Ownership to help get there quicker.
She may also get a pay rise and be able to further cut back on bills and socialising in this time.
But it's worth pointing out that Stacey should wait until her IVA is paid off before she applies for a mortgage though.
That's because, if you’re on an IVA, you can’t take out credit of more than £500 without getting written approval from your IVA provider first.
How to find a mortgage if you've got bad credit
IF you're struggling to secure a home loan due to your poor credit history, then here are some options.
If you have a spotted credit histroy then some high street banks may refuse to lend to you.
As an alternative you can apply for a specialist lender, who is more likely to accept people with poor credit rating.
One thing to note is that these lenders do charge a higher-than-average interest and usually require a larger deposit.
You may need to have at least a 20 per cent deposit saved to apply.
You can use a broker matching service like Online Mortgage Advisor or Just Mortgage Brokers, or go direct to a specialist lender like Accord, Aldermore or Metro Bank.
This article by Which? highlights a number of specialist lenders, how much you will need saved and who they accept.
It will also be difficult to a find a lender who is willing to give you a new mortgage while you’re on an IVA.
Even when the IVA is paid off it will still appear on Stacey's credit file for six years making it tricky for her to get a mortgage.
StepChange adds that it also appears on the public Individual Insolvency Register for three months after completion, so this could also affect mortgage lenders’ decisions too.
Stacey says her credit score has taken a knock due to the IVA, so it's worth keeping an eye on this for free using the likes of Experian, for example, and working on ways to boost this (see the box above).
She may also need to contact specialist lenders or use a mortgage broker to help her find lenders willing to give her the cash.
Stacey said: “It’s great to see how small changes can have such a big impact over a year.
“I had no idea that they could result in such a large saving and I’m really excited now to see how they will impact my life.
“It will also give me such a sense of relief to be able to pay off my debts and to be debt free this year.
"Cash Clinic's review of my finances has been a big help and a big eye opener too.”