No consolation in consolidation
Helen Pridham helps a woman burdened with postgraduate debt . . . and the cost of Eighties pop
DURAN DURAN may have experienced a boost to their fortunes since they re-formed in 2001, but the pop groups second wind hasnt done Michelle OConnors finances any favours.
A fan since the age of 7, she has attended a number of their concerts in the UK and Europe over the past few years, at no small expense. It is a bit of an addiction, she says. Many of her friends are similarly besotted, so it has become a part of her social life.
However, while fun can be costly, the main cause of Michelles financial troubles is more vocational than recreational.
The 32-year-old, from Nottingham, hopes to become a clinical or a forensic psychologist, but finding a training post is not easy. Clinical psychology is a bottleneck profession and the situation has got worse recently as a result of reorganisation within the NHS and cutbacks, she says.
After taking a degree in psychology, Michelle worked for several years as an assistant psychologist. In 2004 she took a masters degree in forensic psychology to extend her options. Since she finished that course last year, she has returned to work as an assistant in a private hospital and earns £16,700 a year. She is now trying to find a two-year training post as a forensic psychologist.
Her decision to take a masters degree has left her with mounting debts. Although her mother helped her financially while she was studying, Michelle found it difficult to make ends meet and accrued credit card debts. After falling behind with her payments, she decided to consolidate her outstanding balances into a £6,000 loan last December.
Late credit-card payments meant that her credit record was less than perfect, so she was turned away by high street loan providers. She ended up going to a specialist loans company, which charges a punishing 25.74 per cent for her five-year loan.
Michelle now regrets the move, which costs her £196 a month. I thought it would make my life easier but I may have shot myself in the foot, she says. She is finding it difficult to cope and the balances on her three credit cards have been rising again, to £3,800 in total. I cant seem to afford to live otherwise, she says.
From her take-home pay of £1,100 a month, £347 goes on rent and £120 on food. Car costs are £150, her mobile phone bill is as much as £45, her internet connection costs £10 and gym membership is £30. Once or twice a week she goes to the pub with friends.
Michelle is so worried that she went to her local Citizens Advice Bureau, which provided a self-help pack. She has written to her creditors to ask if they will accept reduced monthly payments and freeze the interest.
Her position will improve if she can obtain a training post because her income will increase by up to £7,000. At least she will have one less expense this year Duran Duran will not tour again until next year.