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?

A small celebration for me. Yesterday Amazon were offering £10 off a £50 spend. There was one thing I want at £20 (and am using my topcashback vouchers to buy) but instantly started looking for what else I could spend to save £10....THEN I stopped myself, couldn't even tell you what stopped me but I realised it was exactly this behaviour that put me in a mess and I closed Amazon :)
Now if I can repeat that for the next 2 years....

That's great AmI, soon it'll be a habit! I need to stop buying baby clothes. Even if my budget is primark rather than baby gap i still get stuff i don't really need to get.

All great things happening here, I think you realise the retailers aren't doing you any favours and are only after your money it become less easy to spend.

I read as well that amazon bumped up their prices before that deal

I hardly ever shop with Amazon anymore because I don't like their sneaky tactics when it comes to Amazon Prime or the way they work their staff to the max. That makes it easier for me to not shop with them!

If I didn't live in the middle of nowhere I wouldn't shop with Amazon - but we've a small market town about 25 minutes away....further for anything else with any type of larger shop, fantastic for boutiques, independents or antique shops, crap for anything actually needed!
Its a 20 minute drive to get to the nearest shop selling milk, you can easily waste an hour in a day for being disorganised!

Glad I found this thread!
I've just done a 0% balance transfer to clear some CC debt, will look at those spreadsheets and the standing order trick.

So pleased I came across this thread.
I got my credit card debt from about £2.5K down to £500 at the end of 2016.
In March 2017 I took a new job for the sake of my mental health, and in the process took a £5.5k paycut but continued to spend as previously.
I now have £3K in debt across two cards along with a personal loan for my car that has a year left on it.
One cc is interest free and I pay a set amount each month (about double the minimum payment) - the 2nd is the one I've continued to spend on and is not interest free - I think it's 17.9% APR. I pay what I can on that one each month.
Am I better to move both to another 0% interest?
I'm out of the window of moving the 2nd onto the 1st at the interest free rate.
I did also manage to gain about £1500 savings which has now dropped to £400.
All your advice is what I would tell other people, but somehow I've got lost along the way so needed this thread as a kick up the arse!
I'm putting myself on a self imposed book buying ban too as my 'to read' list should last me to the middle of next year!!!!

The advice I saw said that it's pointless to have savings when you have debt because the amount that you will earn in interest on the savings is usually a lot less than you'll be paying in interest on the debt.

Hi there Ginkiwi
If you can get everything into 0% interest, then every penny you pay is clearing the debt rather than giving the bank more profits.

Savings are a tricky area as the return rates on instant access deposit accounts are frankly shite (0.05% compared with the 18% they charge you on a card)
Therefore there are a couple of tacks to take ....

If you have all card debt on 0% then it makes sense to have a "rainy day" fund of enough to replace a washing machine or mend a car.

If you are paying interest on cards then its better to have "loft space" between the balance on your card and the limit on the card
so that you are effectively getting 18% on your savings
if you see what I mean.

Thanks TalkinPeace

Much appreciated, and yes, definitely see what you mean.

I will get onto it this weekend! The credit cards will all be cut up and budgeting ahead will be better. I think cash for the week will have to become a thing again too for the time being.

I need to get a hold of it, and think everyone on here is very helpful/inspiring

gin
On the spreadsheets thread is a link to a budgeting spreadsheet - feel free to download it and use as a template to think about where your money goes

interestingly going cash is often not such a good idea
as then you can "forget" where money is spent.
If you put everything onto your debit card then your bank statement will tell you where the money is going

AmIaWeed
I forgot to say CONGRATULATIONS
Walking away from a fake offer is a really positive and important step.
Your head is going in the right direction.
Your wallet will follow.

I don't use cash as then i find it much easier to see where my money has gone at the end of each month, as talkin says. Especially as me and dh have a joint account so if we used cash it would be hard to keep track of.

One of my Tax clients used to draw out his wages each week when he got paid and then wonder why he never had any money.
I made him switch to just drawing out enough for the Pub on a Friday and all else to be by card.
His spending dropped by £100 a week as the frittering ceased.

I don't know if it might help anyone else but I've got a current account with santander that pays cashback each month based on direct debits and purchases. I get about £10 per month profit (account fee £5 per month). Its called the 123 account. Other banks might offer the same. Also i use topcashback to earn cashback on things i buy - including insurance, broadband, energy - pretty much everything. Anything i earn from that will go straight onto the credit cards.

Oh yeah, and I am on record as getting a client to come and see me to explain why he'd not paid me.
I asked to see how many credit cards he had
he laid them out on my dining table
his wife guessed what was coming a second before he did as I pulled my sewing scissors out from behind my back

jolly
Yup, I have a 123 - its fab

Hi just wanted to join, have made a start on debt free 2018. Am ashamed to say I have racked up over 20k in credit card debt

Mainly due to a mat leave on SMP then a 14k fall in income without changing lifestyle. Then white goods conspiracy (fridge, boiler and washing machine broken, dishwasher is too but sticking with washing up for now). And topped off by PAYE error leaving me a 3k tax bill.

But family 2nd car going this week, which will free up more income for debt repayments. Also made hard decision to stop the kids activities and savings as just need to get on top of this. Feel deeply sad that have emptied their savings accounts to pay that years tax bill but it is very strong motivation to get things back on track.

Will do cash for monthly budget and the DD trick is a good one too, will get that started

I had a letter from one of my credit card providers actually, asking if I was aware that the direct debit has been cancelled and asking me to ensure that payment has been made. That panicked me for a minute until I remembered that DH did it when he set up the standing order!!

Jolly
Sooner of later the banks will have my house firebombed
but until then
They HATE my method
Ha ferkin ha

Milkjet
Welcome : I kinda hijack the thread a bit but I know that the OP is getting there
as are lots of other people
which is a GOOD THING

TalkinPeace - Thank you! feeling quite pleased I resisted the Amazon offer. I think my husband has noticed me cutting back as he has agreed to pay for 2 purchases I've been whittling about 1 being gravel to stop the cats pooping in our front flower patch, the dog loves eating cat poop...I may have encouraged the dog to give my husband kisses so he caved in and bought it!...so I've 2 tons of gravel being delivered and to shift today. Notice how I say I, not the gardener! So I've saved £150 on gravel (thank you bad dog breath kisses) and £30 saved from me doing the work myself.
The second was fencing. For FOREVER I've been nagging about getting it done, BIL has volunteered to come and help and my husband has agreed to buy it if between us we do it ourselves instead of getting someone in to do it. In about 6 weeks I'll actually have the fencing up and some privacy between us and next door - yippee!

Sigh - the above is a lie - although I had great intentions, My son has got home from school and after shifting a few wheelbarrows of gravel I've opted to give him a fiver to do it.

Well done AmIAWeed. I know paying ds to do it may seem like a set back but it is much cheaper than a professional and teaching him to work for his money

Im confused by remortgaging and whether its a good idea to do it to reduce the interest. I have just under 2 years remaining of a 5 year fixed mortgage at just over 5%. Is it a bad idea to try and remortgage to a 2 year fixed rate to get a lower interest rate and then hopefully overpay it? as the new monthly payments would be less than im paying now based on some very simple calculators.

Jolly
it depends on the fees
If you pay a fee of £1000 to save £10 a month it is not a good deal .....

It might be best to just overpay the most you can between now and the end of the fixx Inever had a fix, never trusted them and then pay down all you can afterwards