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?

EATING OUT!!! Totally ruined my weeks budget already with brunch yesterday and lunch today.

ami
I get travel sick so we have a midway stopping point at a discount shopping centre
Why did you even go in to the centre.
A walk around the car park would have cleared your head and cost you nothing.
Before I know it son has a new coat, he did need one but then Daughter gets one, she didn't need it.
So your children have gone through December without coats
or are these extra coats that in actual fact neither of them need.

You are impulse spending.
It has to stop if you want to get out of debt.

Oh and the dog escaped again from the garden, no idea where he's getting out but it makes me want to spend the £1500 on fencing...which I know I shouldnt
Too right you should not.
Take the dog out for walks or keep it company in the garden till you find the escape route.
Then block the escape route with scrap wood from a builders skip

TalkinPeace - thank you for your harsh words, honestly I do need a good slap sometimes.
Coats is an odd one, my son is autistic and his current coat is too small, its taken forever to find one that he's willing to wear so he has been wearing one that is too small through winter.
My daughter had a hand me down, but it was a perfectly good hand me down so I admit this was an unnecessary purchase.

As for stopping at the shopping centre, erm....no excuse we've always done it and were picking up an order for my MIL but we could have gone straight to the shop and out without the detour :/

Fence comments taken on board! If you are out with him, he stays with you, minute you leave him he gets out...I work from home so make a point of stopping regularly to take him out as it forces me to take a screen break but this morning we'd been on a super long conference call, and I was replying to loads of messages so thought it would be fine...of course it wasnt.

Without being flippant and spending money for the sake of it, are there any self help books people have tried and worked to stop the impulse shopping? I can always always justify it at the time, then add it up after and the guilt kicks in

Hi, a bit late here but is it okay if I join you?

I'm living in an overdraft and it's gotten worse with the new daily charges they are now adding. I had thought about getting a loan to clear it and close the overdraft facility but I am at my credit limit sue to a car on hp. Ironically my credit rating is good but I'm stuck in this overdraft and struggling to work my way out.
I followed one of the links to the spreadsheets and have downloaded the app- not sure how to transfer the details across so thought I'd just start my own with my details. Only thing is- I'm not sure whether to put my starting balance as my income or as a minus amount that my overdraft is sitting at? How are others doing it if they're in an overdraft?

AmIAWeed the damage is done now, learn for next time. Leave your card at home, research the menu before going take out the cash you need. Bring a contingency of £40? In case of emergency fuel, tips, etc.

Kids coats are essential but shouldn't be bought on a whim. Give yourself a decent budget, £25/£30 for a good coat and stick to it. Again take out the cash and go to an actual shop. If they haven't got anything for that money your in the wrong shops. Trespass to lovely children's coats for good prices in the sale.

I'm not sure what type work you do but I would be giving your clients a date in which to pay you or you'll be seeking legal advice. And maybe from now on take 50% deposits before work has been done.

Again this weekend will have to be written off and paid back as soon as you get the money from your clients. Don't get disheartened, keep your head above the sand and keep pushing on.

I know you've said before your oh earns more than you, could he not have at least gone halves for the meal, bought the kids coats? Maybe he could transfer some money to the credit card. After all they're his kids to.

We all here for support, keep sharing, we all make mistakes but it's about learning from them

Ljlsmum welcome

If your credit is good could you take out a 0% credit card to clear and shut down the overdraft?

As for the spreadsheet I'll let ta1kinpeace come along and explain it, she's the expert

Yes that is what I'd looked into doing iammegan but because of my car being on HP and my mortgage I am at my limit and have been declined loans to clear the overdraft. I know to just budget hard to get rid of the overdraft and slowly reduce the overdraft limit as I go.

AmIAWeed
Consider your shoulder firmly grasped and your spine stiffened
Seriously though : it is all about deferred gratification
Once you understand that you will get more pleasure by deferring the purchase and getting it right - because there will be no guilt - it gets easier.
But its hard at the start.

Ljlsmum
If you have a stinker of an overdraft you will be paying eyewatering interest rates and fees
so against my normal advicee - yes. Take out a loan.
See what the best rate the bank will give you to clear the overdraft plus £200 buffer for the account.
Do not go higher than that - consolidation loans are nasty smelly things
but with a fixed loan at a lower rate - say over a year - then you can convert the fees into capital paydown
and bring your spending back under control
without giving the bank too much profit.

Okay another option is to open a very basic bank account with another bank. No overdraft or features. Transfer everything to this bank and set up a standing order every month to the overdraft. You can treat it like a credit card then. Cut up the card so you can't use the money in there either. The more you pay off the less charges you will have to so it's worth paying as much as you can afford every month

Sorry, just saw update about credit rating
could you add the amount to your mortgage
seems contrary but would work ....

ljlsmum welcome of course you can join, it seems I need adult supervision at all times so the more the merrier!!
I don't know the answer to your question but I would assume put it as a negative starting balance that is in your overdraft.

Iammeegan we are a slightly odd couple on that we keep finance very seperate. He pays for everything including his family, I pay for mine - luckily we see mine much less, to be honest with my side its 2 events a year, his family we see pretty much every month.
Kids are mine as opposed to his, hence me paying for coats.
He does pay for other things, my car, the caravan, weekends away - he's not a total arse, he just has an impulsive wife!

Ahh okay, sorry didn't quite understand. I think you need to stop before you buy and really need to cut up your credit cards

I'm reluctant to add to my mortgage and think that with a bit more self control I'll be able to work it back into the black. I do have a separate basic bank account to keep money separate for day to day and the bills go into a joint account it's just figuring out how to put that info into the spreadsheet.

Oh and thanks for the welcome. Hope others are starting to see the benefits of sitting down and going through everything.

I’ve got a couple of questions if anyone can offer any advice or solutions-

I have a credit card, I’ve only spent £500 on it but want it gone. Would it be best to do a balance transfer onto another card with 0%interest or just pay more than the minimum payment amount?

I also have a catalogue account, what’s the best way to be looking at clearing that?

Coffee
Pay it off directly as fast as you can,
do not mess about with extra cards as they are just extra temptation
try triple minimum and its gone in no time ....

Ljls
THe most important thing is to be honest with yourself
that way sanity lies

The being honest with yourself is great advice. I had (early days so maybe still do?) great ways of just blanking out cc spending.

I need some new gym leggings and trainers (geninuinly) I ordered some and then saw a better deal and ordered them. Normally I would think ‘ah well, the others will get used’ and keep both sets, but I’ve already cancelled the original order! Small steps.......

Getting into debt is very similar to getting overweight.

It involves kidding yourself about your true level of consumption
it involves denying to yourself the long term harm you are doing to yourself
It involves blinding yourself to the winces of family as they watch you do the wrong thing

Therefore honesty with yourself is the first stage.

With food its logging everything into MFP and seeing that Haagen Daaz really does have calories in it.

With money it involves looking at your bank and card and loan statements and working out EXACTLY what you owe and admitting to yourself the level of both debts and repayment

The next stage is accepting that change is essential

And then you are ready to make your life better - ideally just the once, for ever.

TalkinPeace I totally agree, I also think there is a level of knowing why you spend the way you do.
My debt has only really occurred in the last 2 years and after much thinking about my triggers for shopping I realise when I felt good about myself I didn't spend so much. I used to regularly treat myself to hair, nails, eyelashes etc - then we had issues with my sons behaviour and sought help from a private counsellor, that was £40 a week so my treats were cancelled to pay for this...I feel bedraggled all the time and shop to compensate and make myself feel good. This weekend when I fell off the no spend wagon all the money I spent was on other people so I still look/feel crap.
Since November I've been having my hair done and facials which has boosted my confidence and helped me realise how much I am spending, dry January is also helping as I have so much more energy and my skin is already looking better. Husband has agreed to pay for my eyelashes and i'm booked in for microblading of eyebrows as bonkers as it sounds I am sure if I feel good and confident my ridiculous spending will stop.
Tax bill money has also been sorted so come February all commission can start going on lowering my credit card debt, with my extra energy and bounce I can ditch the gardener and maybe lower the cleaners hours. I am sure I will need to check in regularly for an occasional shoulder grasp and shake though!!

AmIaWeed
Well done on analysing it.
If between you and your DH the beauty side is fully affordable and controls the other spending, go for it.
I am sure I will need to check in regularly for an occasional shoulder grasp and shake though!!
I'll be here for you. The spelling of my name might vary but I'll be here.

Stand tall, be proud of starting 2018 in the right frame of mind.

I'm scared to add up our debt. It's somwhere around £20k on credit cards and a personal loan. We've got them all on the lowest interest rate we can, or will have in the next few days and we have consolidated 5 credit cards down to 3.

Im a bit confused about the direct debit thing. Do i just replace the direct debit for each card with a standing order for more than the minimum payment? Or Can i just leave the direct debit as it is but also set up a standing order for as much over the minimum payment as i can afford? I'm worried about getting my dates wrong and getting penalised by the credit card company.

Hi Jolly
Welcome to the gang.

The Standing order trick counteracts the fact that on credit cards (but not loan agreements) the amount they take by direct debit drops by a teeny bit each month so that the debt takes years and years (like nearly 20) to pay off.
If you pay what what you afforded this month every month, the repayment term drops to as little as two years.

The absolute safest is to set up the standing order for what you paid this month
set it to pay a day earlier than the direct debit
then cancel the direct debit.

If you happen to have any extra, pay that across as well and the repayment period will drop really fast but you'll have no chance of missing a payment.

The card company will NEVER suggest that you do this, as it trashes their profit margin

Thank you talkin! I think i get it now - they control the debt by taking a little bit less, so if i control the debt by using a standing order they can't do their sneaky little trick. Am i likely to encounter resistance from the cc company when i change to a standing order?

Hi. I’ve just joined the thrifty thread but want to join this one too if I can?

I have always left DH in charge of money but we have hit a few rough patches (illness where I wasn’t earning) and had a few big expenses all together (new car, new fridge, new washing machine - all needed as old ones broke) and a review of DHs spreadsheets has given me a kick up the arse (as we waste so much money)!

The debt we’re in isn’t huge, our outgoings are manageable along with steady payments against debts with a nice amount left over for living. All I need to do now is stay on track!

I also want to thank you for the standing order trick! I’ve already done it for both mine and DHs credit cards - again, the amounts aren’t huge but am hoping that based on the current arrangement, DHs will be gone by the end of the year, the we’ll increase the payments on mine and it’ll be gone by April 2019.

jolly
Am i likely to encounter resistance from the cc company when i change to a standing order?
Don't discuss it with them - just make the change.
They cannot stop you

Moneywhat
Welcome aboard : everybody who needs a firm grip on the shoulder to get / keep their debt under control is utterly welcome.