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?

Thank you Talkin. I didn't even take into account the interest on the overdraft! I also assumed I had to pay my tax in one lump sum by 31st Jan.

So, in the first instance will start with od and tax and will keep you posted. Am so determined to take control.

How is everyone doing? I read on here about using a Monzo card for budgeting and I got one and it's brilliant, your balance is instantly updated when you use the card, you can also set up savings pots on it for various things and there is the facility to lock them for whatever period of time you want until you can get the money. I have put my food money in for January and have left main account for the normal bills and direct debits. Hopefully this will help me monitor spending a lot more closely. I have D Twins with January birthdays so unfortunately January is just as had a month as December for me!

Haven’t rtft so don’t know if it’s been mentioned before and ot won’t be for everyone.
The government have started a new saving scheme whereby if you put £1 in they give 50p.
It is for 4 years and available to people on certain benefits.
You can access the money if you need it but will loose some of the interest. You can put £50 per month max on it. Both me and my partner have one.
May be of some use to those with a large debt if you can shove it into an interest free card and save some each month.

@Msdebt mines about the same 🙈

@Cassimin
Could you link to that savings scheme please
as 50p to the pound sounds a LOT

@oldgrinch
That Monzo account / card sounds rather cool
monzo.com/

Aha,
I found the account Cassimin was talking about
www.gov.uk/get-help-savings-low-income
you can put in up to £50 a month
and after 4 years they add 50p to every £ that has been in there for the 4 years
so an interest rate of 12.5% which makes a lot more sense

I have to say though that people in debt should clear all debt that costs more than 10% before setting up one of those accounts

Sorry just got in, yes it’s the one above.
My partner and I are putting £50 each in per month. Planning on using it to give my kids a start off in a help to buy account. So they’ll also get a bonus.
I was in debt a few years ago and by being really frugal with food, clothes etc I managed to get it down so that I could put it onto interest free credit cards.
Once they were paid off i was debt free (except for small mortgage)
I know lots of people who remortgaged, I never did this I just used low interest loans. This means we have lots of equity and small mortgage.
You really need to be very savvy and look around for financial help.
Martin Lewis is a good start.

You really need to be very savvy and look around for financial help.
THIS
with bells on
I'm an accountant and I was in debt for years

Sorry I've been absent. Last month wasn't great for me. But onwards and upwards. Hoping to clear £500 off the credit card balance this month. Will let you know if I succeed with this. I'm definitely being more aware of my spending and jotting everything down is a real eye opener! A big problem I have is overspending at the start of the month and then struggling massively at the end. That needs to change. Loads of great advice on here, thanks all.

Moneyworries
Glad you are back
and glad you are hanging on in there
yup, recording every penny spent really brings focus
good luck

Ok I have just set up a standing order for double my usual minimum payment, and cancelled the direct debit. It feels like a
complete relief. CC has £6k on it and I was turned down for a 0% card.

Deminism
Depending on the interest rate, and if you can avoid putting any more onto it, that should be clear by this time next year.
Nice one.

Hi all, please can I join.
I would really like 2019 to be the year I get to grips with my debt.
I don't think I can possibly pay it all back this year but I want to make a really good start at it.
I am single mum of two so in this on my own but actually prefer it that way. A lot of the debt was accrued while with my ex so I'll be glad to be rid of it.

Reading this thread with great interest. I've got myself into a huge amount of debt over the last 6 years or so. There are lots of reasons but essentially I've been living beyond my means and doing a lot of emotional spending.
I've got 3 young adult kids who have all been at uni and returned back to live at home or are at home for holidays and need to be supported. I work full time but don't earn loads...I find full time work extremely tiring and stressful and would love to cut down to three days but financially it's just not possible.
My mum died earlier this year. I did a whole load of emotional spending on the back of that.
I'm lucky that there will be a small inheritance that will clear my debt.
I'm deeply ashamed that clearing debt is all it will do and also very much aware that it will do nothing to address the problems that caused the overspending in the first place.
This is my one chance to be clear of debt (barring mortgage) and I don't want to fuck it up by running up debts again.

Hi there aleC4
Welcome to the gang.
How much do you owe, to who and what are the interst rates ?
Once we know that, a plan can be formed.

Welcome JollyHostes
Its all upwards from here.
Emotional spending sucks you in. You do it to feel better but it makes you feel worse so you do it more.
BUT
once recognised, it can be controlled.
Try keeping a "mood diary"

• how you feel when you want to spend.
• Why you want to buy the thing you want to buy
• what other things you could do to make yourself feel better even for five minutes

Read up a bit on deferred gratification and mindfulness based stress reduction
both of them will help to get your brain in the right place to get the debt under control.

If you are using the inheritance to clear debt, then a really good mental exercise will be to quantify how much you were spending on debt repayment and put that amount into a savings account - so that in a couple of years you have your Mum's legacy there to enjoy all over again.

Thanks so much for the kind reply.
You're right that I need to do some introspective thinking about why I can't stick to a budget and your suggestions are really helpful.

I also really love your idea of saving up to replace my inheritance. I want to have the self discipline to do that!

Thanks for the welcome.
I owe £10229.72!!
It's a mixture of 2 credit cards, Next directory and Very.
Interest for the credit cards is in the 20s % I believe but I think the Very is something horrifically high like 40%!

I definitely need to join this!
DP & I bought a house last year - he had a deposit from inheritance but I didn’t, and we wanted to go into the house 50/50, so I borrowed 10k from my parents. It was very clear that it was a loan. I pay them back at £500 a month, and my salary is only £25k pa so after tax, NI, pension, student loan etc I take home about £1500. My outgoings are as follows:
£500 to parents.
£375 - my share of bills.
£200 - car finance & car insurance.
£100 - servicing credit cards. I have about £2k personal debt, & £2700 which we bought a new kitchen on which we pay off jointly each month though only at about £50 per month as it’s interest free.
Constantly have no money, so spend on a capital one card which I pay off each month as it isn’t interest free. There’s £1000 on there at the moment, so will probably take me three months to clear it at about £350 per month, meaning I’ll be paying some interest. Not paying my parents isn’t an option. Would leave to be debt free this time next year.

Hi there aleC4
Okidokes. You need to pay them down in order of interest rate.
Get the two credit cards onto standing orders and then leave them alone.
THe Next card you should be able to standing order as well

then EVERY available penny goes off the very debt

as soon as its gone, those repayment amounts get added to the one with the next highest interest rate
and so on till all four are gone.
I reckon you'll have all four gone in just over two years.

aleC4 - would there be any chance you could take out a card with 0% interest on balance transfers and transfer some of the debt to that? Could save you some money I would imagine.

Hi there yorkie
Hmm, I cannot see any easy solutions to your situation.
You have invested in a house and a kitchen. Good call.
Your car payments sound high - is there a way to get a much cheaper car?
And is the £375 including food?
Could you do dry January to save a few bob and throw that at a debt?

I'm not sure I would be accepted for a new card, my credit rating is pretty shit from my days with exh.
I just put all the figures into a debt repayment app and it says my debt free date would be September 2021. That sounds a long way off!
I understand the standing order thing and how it works but how do I go about setting it up?

aleC4
Check each of your accounts into my spreadsheet and see what dates come out ..
Should be a lot sooner than 2021

Standing order - go into your online banking and set it up for the day before the direct debit would go out
and then cancel the direct debit
sorted

@TalkinPeace more like two years surely? Standing order is £300 and the amount is £6000

Hi there Deminism
Ah sorry, just checked the sheet. yup you obviously had one of those bastarding low minimums
on £300 a month you are looking at around 2 years
BUT
every extra pound you can pay off will shorten that term