1 year challenge to clear debts

[IwanabeDebtFREE]

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

[createacard]

Hi everyone, I am new to mumsnet so just take a browse around the site. What a great thread this one is. I too have some debts I would like to clear. I use my bike when ever I can, although I'm limited a bit as I live out in a village. I use my woodburner as much as possible in place of my heating and I also have one of those monitors that tells you how much electricity you use and I make sure everything is switched off before I go to bed. I have three ventures up and running, one is with an online greetings card company called SendOutCards which I have enjoyed doing for a year now and recently with Fm perfumes and cosmetics. I also had a friend of mine show me last summer an opportunity with Banners Broker. If my spread sheet is correct I will be debt free by the summer, after that I intend to overpay on my mortgate. In the meantime I will stay fit using my bike.

[Ikeameatballs]

How can I work out what to do about my car finance? I have worked out that approx £60/month of the repayment is interest. Will I be better off trying to pay it off with a credit card on a 0% deal and then hoping that each time I need to switch I can do so onto another 0%? How will I work out costs on that if I assume I need to pay 3% each time I switch card deals ???? [head explodes

[Mum2Fergus]

Hi Trinity...Id definitely target anything interest bearing first...and maybe then the CC, you want rid of that before interest kicks in...

[trinitybleu]

Thanks for clarifying. Our little debts are only a couple of hundred quid on store cards so they'll be gone this month.

CC is on 0%, money borrowed from family is interest free and doesn't feel right to target the mortgage first...?

Forgot to list the family loan... 12k to repay from the last time I was redundant.

[Mum2Fergus]

Great stuff, well done you!!

[notactuallyme]

Hi - yes to both of those! Counting dowm to payday now and feeling quite inspired!

[Mum2Fergus]

Hi Notactuallyme how are rhings? Did you get your spreadsheet updated ready for a fresh start? Have you checked out the Credit Crunch threads for some tips?

[notactuallyme]

Hi all, waiting for payday so I can start the whole paying stuff off thing again - really keen to get to a point where we see some of the huge salary dp earns. Snowballing here, but smallest debt rather than highest interets rate, just for the 'achievment' factor.

[Mum2Fergus]

Hi Trinity, and welcome! Snowballing is when you make a minimum payment only to all debts except the one with the highest interest rate which should be paid with as much as you can put to it. Once thats repaid start on the debt with next highest interest rate. Continue like that til all is repaid.

[trinitybleu]

Hello all - we're trying to clear our £14k cc and then start on the mortgage (£197k).

OH started a fab new job this week and we want to use the increased salary to make a real impact on that.

But I am being made redundant next week.

What's snowballing??

[FiveGoMadInDorset]

A bit of a set back in the fact the money owed by HMRC to me as I am on the wrogn tax code will not be paid until April/May at the earliest but by then will be over £2k, which will pay of one CC and then the other one will be paid of easily when a loan is up in July, so still on course for debt free by Christmas.

[notactuallyme]

I think that might help; part of it is resentment we have ended up like this. Dh came back with 2 shirts, paper and that's all for today. (He wears one everyday) I do need to start caring about the future!

[Mum2Fergus]

Hi notactuallyme...I find its a mindset thing. Id spend spend spend at every opportunity but have learned to think think think instead...do we really need it? If the answer is yes, can you get it any cheaper? Why dont you pop over to the Judicious January thread on credit crunch...we do our best to post daily there to keep track of what we're spending ...

[notactuallyme]

I am doing really badly. I can't seem to get out of the mindset that we earn money, work hard, so are allowed to buy stuff. Instead of buying cr*p i'm finding excusues to buy things for the kids - gloves, a coat etc.
Otoh, i am really down which doesn't help - ill kids, very poorly hospitalised granddad etc.

[williaminajetfighter]

Count me in as well. I moved south and took a pay drop at the same time and it has killed me. I owe about 10k in credit cards so if I can get them paid off this year it would be a dream.

I'm on a good salary and don't live excessively and track all my spending, but find that I really have nothing left at the end of the month. It's depressing as heck that this year is going to be all about frugality. Drats.

[notactuallyme]

That's a good idea - I don't have a column for that. I really hope to do this! I need to!

[Mum2Fergus]

Dont beat yourself up notactuallyme...we all have necessities at some point. Have you done a proper budget yet? Make sure you put in a line for times such as those when kids need clothes/shoes/etc ... a little each month will soon build up. Good luck!

[notactuallyme]

I am doing very badly at this....i keep leaking money/credit on things - just bought the dcs all pajamas for example.

[Mum2Fergus]

I feel like Ive finally got my plan together mortgage approved and move to new house next month! All things considered a year wont cover my plan so started another thread in Money Matters - Mortgage/Debt Free Wannabe. Im aiming to achieve it by Marcg 2023! Long way off, but it feels good

[EricNorthmansFangBanger]

This is such a good idea. I've wandered over to the MSE forums but haven't taken the plunge yet so to speak. I'm currently a student, in final year and DC3 on the way. DH is due to start a job at the beginning of feb, it depends on credit checks and stuff so keeping fingers and toes crossed that he passes those.

I'd love to wipe a big chunk of debt off if we can. Apart from the mortgage we have around £12,000 worth of debt. Adding all up is scary but needs to be done. At the moment we have just been trying to keep up with minimum payments, hoping that from March we will be able to pay off a little extra. Also hoping to pay double what we pay now for the mortgage, as we are currently paying interest only. My plan is to at least half this debt by the end of this year and take no more debt on.

[PeppaPrig]

I'm in.

We made a spreadsheet last night for easier budgeting, and resolved to sort debt out this year. We owe about 18K, and want to owe less than 5K by the end of the year. When debt-free, we want to overpay on the mortgage. I'm on mat leave so it's a frugal year anyway - lots of NSDs required!

We have a loan (for house deposit from a friend, interest free) of 7K. Priority is to pay this back by snowballing.
I owe SLC about 3K. Am in monthly repayments.
2K on my credit card (furniture,wedding, 0%. Currently pay minimum each month.
6K on DH's card (failed business set up costs, 0%).Currently pay minimum each month.

[notactuallyme]

I'm in! We have 60k between us, and are interest only on the mortgage with zero savings. Couldn't get much worse! Lost the CB from next month. Decided to snowball but to do the smallest debt first because the psychological benefit is in seeing them go, rather than knowing i'm reducing the highest interest rate iyswim? Getting a bonus next month so should be able to make an impact.

[whyno]

I'm so in! Need to get ready for number 2 arriving in the summer!

[Nomoredebt]

Haven' t been on this thread recently but have been focused since Xmas and have managed to get the majority of our debt onto interest free credit cards. Approximately half is just for six months and the remainder is for a year. There will also be a few bits and bobs of interest to pay on the cards I have moved from but I hope to pay them off in full on payday. So now I need to focus on clearing as much as possible from the cards before the interest free period runs out.
I'm going to try not to buy anything but essentials for the next 6 months to try to clear as much as possible. I still have a freezer full of food as I took advantage of some of the reduced food in the shops after Xmas. with some careful planning I should be able to manage on £25 a week for fresh stuff for a while.
I' m also going to try to do the ' payment a day' I have seen on MSE to chip away a bit more.
Good luck everyone!