Becoming debt free in 2018

[iammeegan]

I've decided to make a plan to become debt free in 2018.
Money and debt give me terrible anxiety which means I bury my head in the sand and it's become out of control!
So starting in the new year and I'm going to stop spending and start paying everything off.
I would love some support and people to help motivate me.
I have already worked out that I can be debt free in 14 months with some serious cut backs and forward planning.
I'm currently on mat leave but will be returning to work in March which will allow me to pay off more each month

So would anyone like to join me?

I can afford to pay £50 a monthly extra on both.
I only owe £600 on the store card.
Would you recommend paying £10 extra on that and £90 extra on the cc ??

Also do I inform the cc company I’m changing it to a standing order or just the bank ?

Ta1kin sorry if I sound stupid - but what's the difference between paying bit off via DD and standing order?

@confusedwife84 I don’t understand the difference either

I'm in, have somehow manages to wrack up quite a bit of cc debt and it's scary. I really wished I'd paid more attention to apr. I have a Barclaycard and mbna, both at 6k and currently paying minimum payment on both. Barclaycard that payment is £220(ish) and mbna £70. I'm embarrassed by my lack of money skills.

If you pay by DD the minimum amount each month it goes down every month which means it takes a long time to pay off as interest keeps adding on. If you pay the same amount every month by SO it's fixed so the total repayment time is a lot less even with the interest.

Ah Damia thank you, I understand now. At the minute I am struggling as on maternity leave and I am still using the credit card to make up around the last week of every month. I go back to work soon and I know I won't need it then, so I'll be able to pay much more off. I hate it.

damia has it

only / confused / shake
The best thing to do is to download the sheet and then plug your numbers in ....
at the top are the summaries but they are not visceral
the best way to make the change go into your bones is to set it to "print preview"
DD set of repayments will be around 13 pages
STO repayments will be three
and yes
as darnia says - with the STO you pay off more and more capital every month and thus reduce the interest in a fraction of the time

it really really works
and you are only paying what you already afforded this month

confused
A trick for those who have to use the card ....
set up a standing order for the minimum payment on your credit limit
if you card is not maxed out you will burn through the debt
if it is, you will burn through the debt
AND it gives you leeway to spend emergency money

BUT
if you have a credit card on tickover, you really really need to evaluate how much you want to make the rich gits richer

Can I join in? I’m fed up with our income servicing debt rather than being enjoyed. Between us we have around 7k of credit card/store card type debts - the largest individual is 3.5k. We’ve thought about consolidating it but wonder if it’ll just mean dragging it out longer. If we could get it paid off we’d be over £400 a month better off. I do a monthly spreadsheet so I know what we spend, so while it’s not getting worse we could do with getting a grip on it.

)))))))) Consolidation (((((((
Nasty icky stuff
Switch them all to standing orders now
then breathe

I know I'm mercilessly hijacking the thread but
(a) I have form for this
(b) I'm right - it works

Sooner or later a bank will have my house attacked, but till then I'll do everything I can to stop everybody paying them

Ah thanks Damia Ta1kin

shake
The spreadsheet is hard work,
it takes people a while to get cuddly with it
but when they do .....
I'm an accountant and wrote it for a tax client

if ANY bit of it does not "click", please ask : I wrote it so find it intuitive
but know that many of the people who most need to use it,
loathe numbers with a willing

No question is stupid the first time it is asked
Debt freedom is on the near horizon

Are some of you able to switch the debts to 0% ?

0% is good - but then you need to raise the repayment not drop it to benefit
the buggers at the banks do everything to make you pay more
BEAT THEM

Ta1kin I’m doing my tax return tomorrow so I might as well have a go at the spreadsheet at the same time! Why do you say no to consolidation? I’m wary of doing it but can’t put my finger on why so I’d be interested to hear your views.

In terms of the standing orders, do you need to contact the companies to ask to change or just do it through your bank?

I think Im doing that. My C.C is 0%. They want £89 a month, I pay £100.

Im.probably not making a quick enough dent in it really. I am also saving £200 a month in a seperate account towards it.

Thanks everyone, for this really useful info. Our debt was£14k, clearednow but creeping up again. DH likes to have savings but I’ve always thought it was mainly worth clearing debt first.

english
standing orders they will try to scare you off .... I am right
tell them nothing, do it all online

Consolidation : because they will always lend you more / extend the term
they make money that way
they are not trying to help you

totem : for 6 months, throw that £200 at the card on 15% and lose the 0.1% savings rate - the maths is clear

blerg
In the big old debt threads we took credit card limit as emergency savings
ie clear all debt
whack, bang, whump
but have a card with a £2000 limit and a £1000 balance = a £1000 emergency cushion

check the old threads, I'm not in debt, but my clients are and I was. I know viscerally how it feels

Should I pay £50 extra of each and then pay what I was paying on the store card plus the extra £50 of the cc, once the store card is cleared?

only
Do what you know you can afford.
That amount is the number you repaid this month
no more, no less
set realistic goals
honestly, it works

garden
sadly overdrafts are worse than credit cards
so I'd suggest a loan to clear an o/d
and then snowbal the loan

Dariel
Nice plug.
How much were you paid?
The Dave Ramsay book is OK but does not know UK law

My spreadsheet is free

I looked at the Dave Ramsey's FB page & sadly some of the steps are unrealistic if, like me, you are on a limited income. Saving a grand as an emergency fund is nigh on impossible when you barely make ends meet!! At least with a spreadsheet you can see all your sums, negotiate areas you can cut back on then go from there.

First bit of Dave Ramsey if baby step 0
'Four walls'
So starting with a budget/spreadsheet and making sure all bills are up to date. Then move on to ef of £500-£1000, then start with debt such as credit cards/overdraft etc.
It's not a quick process, and in still getting my head around starting it properly, but its been worth lurking on the fb page to see how it works for others.
There are lots of podcasts available