A thread for people trying to pay off debt?

[moneyworries8]

Would there be any interest in this?

I'll start us off. I'm 30, a SAHM with 2DC.
Our debts are:

£4,000 loan that we've been paying off for 6 months.
£2,300 on a credit card

The debt is manageable but I've had the realisation that if something doesn't change, these figures are going to get bigger and bigger. I know it's a hard time of year to start but I don't believe in "waiting until the new year!"

We could post on here for advice/support as well as sharing our successes (and failures, but hopefully there won't be many of those) with each other. I feel like I need some people to help keep me on track.

So, is anyone interested?

Hi there Bumble
All overdrafts should be on regular statements
on your bank statement should be the regular payments for all loans / cards / borrowing you are servicing
ask for updated statements
anything like utilities should be chasing you quarterly

take control of it and it gets better

I have a new address and a new bank account so not sure I can access much tbh. Not unless I just wait for trouble to fall through the letter box

You need to make sure that all post from your last address is being forwarded
(print a sheet of stickers and give them to the new residents)

You need to contact your old bank

Hiding from debts does not make them go away
it makes them grow

@TalkinPeace I know that's why I was asking if there's a way of finding out
I haven't had my mail forwarded (ironically couldn't afford to)

ironically couldn't afford to
It costs nothing to take a sheet of stickers to the house and ask the new people to forward

I was asking if there's a way of finding out
Do you not have ANY of your own financial paperwork?
Bank cards, statement, apps, anything?

I didn't post to get dug out

Bumblebee
I can help you if you work to help yourself.

• sort the forwarding of your post
• try to contact all of your former banks ; if need be go into the local branches of each tomorrow and talk to them
• try a free credit check report to see what is out there

on the up side, the fact that they are not hassling you already implies its not as bad as you might fear

No it is definitely as bad as I fear I just don't exist again yet
I can't be found on a credit check at the moment but could try contacting old banks etc.

Okidokes.
Yup, wait on the credit check thingy.

So talk to the banks as soon as you can

If you are seen to be taking control before they track you down it will count MASSIVELY in your favour when haggling over what a "reasonable" debt management plan is. ;-)

Please may I join,I'm great at saving money but even better at spending it..I have no balance at all.I would just like somewhere to come & read how others manage to stay strong when resisting spending like a lunatic please

castiel
Have a read up on "deferred gratification" - it will help you better understand your spending habits.
Then do a bit of looking into "mindfullness"
as both of those will start to get you head into the right place to start saying
I do not need that. I might want it but I do not need it
which is the route out of debt.

@castielchace I found decluttering really helped as in sorting through things to throw / recycle / charity shop it helped me get a picture of what things were a waste of money.

Also putting stuff back and deciding you will come back in a day or two for it. By then you have time to decide if you really want / need it.

Hi, late to join the thread and just catching up. Am down to 7.5K in a loan, and starting to wonder if the standing order method might help. Key thing for me is to not get too obsessed with paying it off asap (it is the final hurdle to being able to leave current job based in a hellmouth). Exercising patience and not letting my budget fall apart to make up for it. If I do this sensibly I could clear it by July 🤞🏽

Apols if this has already been mentioned, but my bank has been texting me re my CC abt how making overpayments no longer reduces the amount taken out by Direct Debit. So if you have a DD set up (e.g. for minimum or fixed amount) and make an additional payment before that, the bank will still collect the amount set via DD on top of it. Hope this helps.

cousin
Welcome to the gang.
The trick is to cancel the DD - card company hate it but there is nothing they can do if the STO is going through

loan : if its on a fixed repayment amount for a known number of months, leave it be.
Clear all other debt, get out of overdrafts
if you then have spare, look at paying a lump sum to clear it early

hello Talkin’, loving your work!

will cancel the DD, it is a v small CC to help me manage variable costs like train travel (cheaper to buy as i go thanks to flexible working, but i struggle to keep sight of this cost as i work with my budget thru the month. CC is always paid in full each month.)

my loan is the only debt left now, on fixed amount repayment plan. no OD, and just finished paying for a car and completed a phone contract so have managed to free up £300 a month. i budget monthly and wonder now whether to save or throw more at loan (my app lets me make additional payments)? i’m watching incoming costs (February is a tough one with MOT/service/insurance renewal) so I’m saving for that and letting the loan take care of itself for now.

Me! We have a larger loan and catalogue bills that need paying off this year.
The loan is taking forever with a £500 a month payment, if I can get rid of the rest it will make life a lot easier.
I need to get some savings back in the bank, DS1 has been in hospital for 6 months in and off this year and it's wiped us out.

If the loan lets you overpay and you are nearly in full control, then its time to move to the next stage ....

Unused credit card allowance as you pay it off each month is reverse savings
eg £3000 of card balance headroom is that amount of emergency spending

so
whump the loan to save the interest
and know that you can put emergencies onto the card for a month or two at a lower cost
IYSWIM

yep, understood. am also going to check out your budget spreadsheet to see if i can improve oversight on expenditure.

thanks very much Talkin you are a

My loan is £16k
I have catalogues,

Next
Littlewoods
Very
AO
PayPal

I need to focus on one at a time and hammer them as much as I can. {gulp} I'm so angry with myself for letting them get this big.

Titsalina
The catalogue / store card companies are horrible. They suck you in.
But you can do this.
You have to work out how much you owe to each.
What amount, what rate, what minimum payment.
Keep them all ticking along - with the same repayment each month, rather than the reducing one they encourage on you
THEN
throw every available penny at whichever has the highest interest rate
and snowball your way after one after another

get into decluttering and ebay / facebay / gumtree
and throw any money earned at the debts
and you'll start to feel well in control before Easter

I would recommend a CAP (christians against poverty) course as they deal with the emotional side of spending and help organise debt and will talk to creditors for you. They are also recommended by Martin Lewis the money saving expert too, while the courses are generally at a church they are not religious or evangelical in that sense I know a couple of people who did them and it really helped with the mindset around debt and the future

Hi! Mind if I join?

Over the last 6 months me and my husband have worked well to make big payments and made a really good start reducing our debt. I think taking control of it and budgeting is the biggest tip to pass on!!

But now we have a baby on the way, which will involve a good few months SMP followed by heft childcare costs. I’m not sure whether I’ll be entitled to any sort of tax credits (tried a few of these calculators but not had much joy), so just assuming not. Just feel as though we were making really good progress and it’ll be frustrating that we won’t be able to continue with the big payments!!

One thing is for sure though, I’m never putting myself in this position again!!!

Hi there Teaandbiscuits
Congratulations on the small person on the way.
You'll be amazed how much you'll save when you give up work.
No more coffees / random lunches / random drinks evenings / commuting costs / posh clothes
all sorts of stuff
AND
babies are only expensive if you make them that way
get into the NCT / charity shop / gumtree / facebay sales
and buy only what you need

Childcare is killer once you go back to work
BUT
it gets cheaper each year
and the little beggars are worth every minute (mine are at Uni now)

I hope you will all let me in also. We have perhaps one of, if not the largest, debt? 40k-ish I fall asleep thinking about the enormity and how to tackle it. From memory, this is how it stacks up:

3 loans 5,600 (2.5%), 13,000 (3.3%) and 4,500 (7.5%)
CC x 3 14,000 (0%, 0%, 0%s end Aug, Sept, Oct)
Overdrafts will be roughly 2000 by end Jan. (after Christmas and depending on tax bill)

This balance was around the same last Christmas. I really thought we could pay off at 1k a month (which we do) so by my calculations we should have started 2019 with 'just' 28k but after a year of car repairs and very expensive house problems, that 12k reduction shrunk to a rather measly 3k. (The house is sorted now hopefully). Furthermore, after Christmas and an impending tax bill, that debt pushes us back up towards the 40k. sigh.

I have spent hours reading the Martin Lewis site, Youtube with the envelope methods, and Jordan Page suggestions, the snowball method and am getting confused with methods and best way to start.

I also think we should put something away each month for a rainy day (car insurance/house insurance, my tax etc.) each month but never do as I think that extras should be aimed at the 7.5% (largest interest) debt.

Hi there MsDebt - welcome to the gang.
£40 k is higher than many but not the highest I've seen over the years.
Okidokes.
Your priority is the overdraft and the tax bill.
HMRC will hate me for saying this but if you pay the bill late, they can only charge you interest at their standard rate of 3.25% a year
SO
Pay off 25% of the tax by end of January,
then keep the overdraft (rate likely to be around 20%) as low as you can and pay HMRC each month till its gone.

With overdraft and tax out of the way, see if you can throw a few extra pennies at the cards while they are still in zero interest.
And cut up two of the cards so that you cannot run up the debt again.

The loans need to tick along until both of the above are complete.

Emergency savings : the best method for you is headroom on your credit card
ie a card with a £5000 limit and a current balance of £2000 has £3000 of headroom = emergency savings

And do a budget
to make sure this is the road to success