1 year challenge to clear debts(103 Posts)
I owe 25K on a mixture of credit cards and an overdaft. I want to clear this in one year.
I have started some changes, food shopping/packed lunches which will save me at least 4000 alone.
I have listed out the debts with highest interest rate ones to be tackled first and am going to use snowball technique.
I am owed some PPI which I will repay debt with.
I have surrendered an insurance policy this morning which is uneccesary which I can get 4000 for
Going to Ebay and sell gold.
wish me luck the challenge begins and anyone else wish to join me welcome
Good luck! Have you found the MSE forums? There are people on there doing the same thing and coming up with ingenious ways to do it.
I think I might join you. I have £23k debts it would be great to clear them in a year. That will be my resolution
Hope it goes well for you
Get hold of a book by Kath Kelly called " How to live on a pound a day " basically her story about how she saved for a wedding present but loads of tips about how she went about it and things she did for free. Also with food shopping, could you ask any of your friends when they shop to buy the BOGOF things so there are two lots, one for you and one for her ? Look at all the usual insurances/ subscriptions/ tv and phone packages etc to see where you can make savings...... Good Luck !
I was thinking about starting a thread like this! Not sure I can start paying off debts yet as we're not even covering our costs (2 x self employed + 1 x major health problems + 1 x house that won't sell = black hole of indebted doom + trying to avoid repossession/bankruptcy) but I am up for maximising my earnings, selling my crap, minimising expenditure. Kath Kelly book sounds good! Have you looked at manvsdebt.com? Clare, great idea re BOGOFs.
I'm in! Won't post exact details as CBA to name change, but this is what we're doing:
Snowballing debt. Getting rid of the biggest first and paying minimum payments on the others.
Menu planning. I used to do this based on cookbooks, now it's based on what's in the cupboard! Eating from the freezer this week [joy].
Withdrawing the weekly shop budget in cash. Withdrawing my money for the week in cash. Any leftovers go straight into savings (or they will - they're going on Christmas this month and next).
Love manvsdebt - thanks for pointing me there harriet.
Frugal Queen is alsi good - although much more hardcore than I am!
Im in! Have approx £16k to repay...while endeavouring to pull together the last of my mortgage deposit. Current any money left over is split half to debt overpayment and half to savings.
Good, I have company.
Yesterday I fished out the paperwork on a life assurance policy which I can surrender for almost 4k. I have an old account with a 2k overdraft on up to its limit which I top up each month to pay the fees on it. will surrender policy, clear and close this account and use balance for a lump sum to credit card with highest rate of interest. Then I wont have to pay fees on account or cost of policy, saving nearly 1000 in the next year to repay more of the debt. In the event I died, the policy would only pay out the equivalent of the debts, so not worth keeping anyway.
Because i'm self employed I have to earn £250 to pay out £100, the interest alone on one of the credit cards is £200 per month, so I have to generate £500 just to pay it - its insane, and the reason I seem to be treading water rather than being able to save!
Any really boring paperwork jobs I have to do to save money I look upon this way; if someone told me to sit in a chair for an hour and I'd be given £200, I'd do it - this is highly motivating.
Right, who knows the best place/way to sell gold?
Two other things, I'm putting cash in my purse each week and making it last and we are also eating contents of cupboards/freezer until they are bare - should be some interesting dinners
Good luck! Have name changed but in a very similar situation. Will sit down tomorrow and do a meal plan. I think I could meal plan to the end of the month out of the freezer and cupboards with minimal spending on fresh stuff. I'm sick of seeing our wages coming in and so much going out in debt repayments and a lot of it in interest! This has inspired me to sit down and do a proper plan. I'm not sure a year is realistic for us but I definitely need to take control and hopefully it won't be much longer.
Im starting something I read on another thread which I thought was a fab idea. For one week a month the OPs budget is equivalent to what it would be if she was on income support. My thinking is that the things do the budget/save during that week will filter through to the other weeks too. Will bring my household budget of £100pw down to just over £45. Also favour having weekly budget in cash, and when its gone, its gone, no top ups.
Hey I'm in. I spend far too much and I don't know what on, need to pay off my debts and save a few grand in the next 9 months.
Any tips people have please keep sharing them! My big tip is meal planning,
and not going back for seconds just because I'm bored
Me too. Going to do an aldi shop tomorrow instead of tesco. Trying to save up for a wood burning stove.
Also keeping a spending diary. Should help me keep tabs on buying random crap.
Good luck! I have 7k of credit card debt that I am aiming to clear by September 2013... Means not buying lunch, not using the tube, no non essentials at all and living on a v tight food budget. We can do it! Looking forward to the day I will have disposable income again and the feeling of buying something because you have saved for it not on credit and feel guilty!
The cash thing is a great idea which we are doing. I don't have as much as you but hoping to be debt free by this time next year as well.
My tip is that I keep a spreadsheet with my bank balance that I update every day and it has list of everything that needs to come out then how much cash I am allowed for the month, then the next row is next months salary etcetera so I can see the effect of overspending even a tiny bit has on the months ahead. I also keep a repayment by month one and cross one off each month so I can see I am achieving something
I'm going to join you, I also want to be debt-free by this time next year. Have got a spreadsheet and done a meal plan for the next month, going to be hard on maternity pay, but am determined to do it!
Today I am going to the post office to send my eBay stuff, made 50 quid, also made sandwiches for lunch today, DP Nd I have also almost finished Xmas shopping most of it from t k maxx! How is everyone doing? X
Gah, my bank doesn't update online statements for a couple of days, so am unsure how we stand after the weekend. Should be on track for this month though - won't know for sure until my maternity allowance is paid/end of the month.
Friends came to stay but as there were two one year olds, one ill person, one 38 weeks pg person it made for a cheap weekend .
I was updating our family calendar for next year and have added in a column to write in what I have spent and how much I have saved on a daily basis. Might sound a bit anal but think I'll benefit from seeing it written down as constant reminder.
So, I wanted to add in a bit more about my situation to help me track on the post a bit better. I currently have £17,281 debt (11,554 loan, 4,271 on a cc interest free until Sep 2013, and 1,456 on same cc but incurring interest). No overdraft, and paid off my only store card last month.
Im currently repaying debt while trying to put together a mortgage deposit. Why have savings while I have debt? Well, I'm currently renting and for the 2nd time in 3 years the landlord has decided to put the property on the market. I really want to be settled in a place of our own and not risk any upheaval once he is in school.
Ive set up a standing order of £250 every pay day towards a high interest ac and want to top that up with as much extra as I can every month. The only real variable cost I have is housekeeping so have been menu planning - first using up all my fresh stuff then moving on to use up the freezer/cupboards.
So...my commitment to the thread is a weekly update on how I've done with my £100pw household budget, and a monthly update on what I save and/or pay off.
A question for you guys now - what would you do in my situation with any surplus cash at the end of the month? Half to savings, half to debt? Repay all the cc balance thats incurring interest, then move to half and half? Forget about savings for timebeing and look to rent again?
Hi Mum2Fergus I would definitely try to get rid of the interest paying bit ASAP before saving, otherwise you are just burning money and you will save more in the long run. Try to get another 0% balance transfer if you need to delay paying it off. Understand about renting - we borrowed our deposit from DP's dad so we could buy and have stability as we were kicked out of our rented place for no reason other than "landlord wants to decorate" (put the rent up).
If I may ask what is the 100 pw for? Just food? Or petrol / train as well? How many people in your household? We spend under 50 a week on food for the 3 of us
Hi ChicMama, £100pw is for everything except household bills and car expenses (including petrol). 3 of us DP, DS who is 3 and myself.
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