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 @Flamingchips

Currently 0% interest on one card and paying approx £10 a month on the other one , luckily I am in a position to clear this by end of Jan.

I'm not sure I meant put money into savings, more that I think it would be better to save up the money I am earning now for when I'm not earning anything, rather than paying off current credit cards and more than likely having to depend on credit cards later on down the line?

Just not sure what would be the smartest thing to do at this point

How long does the no interest rate last for?

Sorry, I knew that’s what you meant personally I’d pay the debt off and then if needed use an interest free card for any expenditure when baby comes. Either that or do a longish term interest free balance transfer? To me, old debt is worse iyswim?

I think it's just been extended to June of this year. So not long left really.

Yeah I see your point, and interestingly would be saying the same as you usually!

I'm just not sure how I'd fare having to pay mortgage/bill payments with a credit card later down the line if needed, as that's the only thing I'd truly consider using it for.

Wish I could win the lottery already and it wouldn't be a problem!

IrishCypriot are you expecting to maintain the same financial arrangement while you are on maternity leave?

That doesn't seem very fair. Presumably you both want this baby, you not working for a while is one of the costs of having a child to you both as a couple not your cost by yourself. You aren't a single parent (and even if you were you would be entitled to maintenance from you ex)

Apologies if I have misunderstood - but I think you need to have a serious chat with your dp about how the shared costs of your child (including the loss of income during your maternity leave, childcare costs and the babies costs - clothes furniture etc) will be funded fairly between you.

A good way to think about it when you look at all your finances together is that you've come to a fair arrangement when you both end up with a similar amount of disposable income to spend on yourselves, and that you can both easily access money to spend on dc. Ie, you don't have to ask permission for small spends or put them on a credit card you'd struggle to pay off while your partner has lots of disposaable income.

Otherwise, you might end up in a situation where you are running up credit card debts again that your partner could easily pay for in interest free cash. Your financial situation would be worse for no reason.

Again, hope I've misunderstood - but I've seen too many women shoulder total financial responsibility for dc when there is enough money to go around as a family and I don't want that to be you!

Hi @WhirlwindHugs
Thanks for your response.
As far as my DH is concerned, he would cover me where he could.
But in honesty I'm not sure he could shoulder my mortgage payments, at least for very long, as well as everything else.
So the idea is that my mortgage/credit payments would remain the same whilst he covers everything else for DC.

It's also difficult for us to pool everything together as DH is self-employed, and although earns a steady wage each month, the money must be kept in his business account, aside from any joint outgoings.

It's a tricky situation as it does always end in argument when we discuss it!

Ah, I see.

The problem with him buying everything dc needs is that you will be the one on ml actually looking after the baby, so you will need to go to the shops and buy nappies, or that cream the Dr recommended... He can't really do it while at work.

I totally understand its hard when less is coming in and things are tight! But I think you might need to talk about it again.

You said you didn't know how much debt he has? It's probably a good place to start as then you know a bit more about the whole picture.

Cypriot
the money must be kept in his business account, aside from any joint outgoings.
Hogwash.
I am a tax accountant.
There is NO restriction on the self employed taking drawings.

You and he need to think of your finances AS A FAMILY

If you can clear debt, do it because baby brain might make you miss an interest deadline date which would be costly.

NEVER pay the minimum on a card by direct debit
always pay extra
as otherwise you'll still be paying the card when the baby is 18

A quick update from me to say that working out how much i have to spend on a daily basis rather than just weekly or monthly as I have done seems to be really helping me. I've now stuck to my budget for ten days.

Hope everyone else is doing ok.

@Ta1kinPeace thank you for working out my interest rate on my o/d. Yes the first £1500 free is good!

*have done before

Keeping spending on a REALLY tight rein for about six months should set the right habits in place

Hi - I'm joining this thread to help keep me motivated and to pick up some tips on frugal living on the way!

I've been trying to reduce my cc debt since Oct - doing OK but I'm expecting it to be a long haul.

I tried to get a 0% cc transfer in Nov but was refused - not sure why. I wonder if it is lack of credit history (I didn't even know this was a thing that counted against you until recently). Should I try again with another 0% offer?

Good luck everyone. Being in control of money after having debts is a feeling I can’t describe. A good feeling! Small steps really help. Much luck to you all.

Bobinks..try mse for credit card transfer. You can soft search what you might be accepted for
Also ask your credit card companies if they have deals on. my oh cancelled a card at the weekend & was offered a balance transfer.
Don't forget to set up standing orders as BCF advises while your sorting it.

Edit to above...what talkinpeace says.not BCF

Notreally
Yup, I keep BigChoc safely over of the 5:2 board (to which I return tomorrow )

Bobinks
The standing order trick is your friend. Even with a high interest rate it will work wonders.
I'd not reapply for another card just yet as refusals look bad on your record I gather

What’s the standing order trick? Is there any benefit on a 0% deal?

I’m gettjng paid early this month which is throwing me off.

Hi there,
the Standing Order trick is explained in full on the spreadsheets thread
and it does work with a 0% deal

the basic point is that the credit card company will take a slightly reducing amount by direct debit every month - so you will owe them money for up to 20 years.

if you change that to a standing order of this months amount EVERY month
the payment term reduces to as little as 2 years
for no pain at all

Divide the amount on the cc by the amount of months interest free, then set up a standing order for that amount- it will clear the debt before you pay interest.

Ie if you owe £2500 and have 18 months interest free then you pay £139 a month, no interest paid.
The cc company want you to pay minimum payments so after 18 months you still owe them money and they start charging interest!

I need this. Dh and I are overdrawn, as per usual. Nothing on credit cards atm. We borrowed £3k from ds1's bank account to pay for our home extension/renovations.

We really need to sort this out.

Obloov
TBH at least you have something tangible to show for the spending that you will all enjoy for years to come.
But yes, its better to have a plan.
Do a budget.
Do some decluttering.
Cook meals out of the cupboards for a week.
You'll succeed - I'm sure

Ah amazing. I’m currently paying off about 1k a month - my issue is i then put about £500 on each month. I should have tried that a year ago.

Not worried by the interest as there’s none and I need rid of the balance by March. On 24 jan I’ll be at 1.7k so I’ve increased my monthly spends to a better level in the thinking that being more generous with pocket money will mean not putting stupid amounts on the card.

The only thing I’ll miss are my tesco points!

Thank you TPeace.

We are already doing exactly as you suggested. Dh has sold £200 of clothes, shirts, boots on eBay and has another 18 items finishing this Sunday.

I am going to eat out of the freezer and try and use all the stuff we have in the cupboards.

I’ve managed to pay off both my small overdrafts do they’re both at zero now which I’m pleased about ... but I’ve just booked a couple of nights away for DP 30th on my credit card :(

Notreally - thanks, I did use MSE soft search to choose the CC and despite good score (97% or something) got refused

TalkinPeace thanks also. will sit tight and continue with paying off the max I can afford each month for now and try a declutter

If you've only just booked you could cancel it what? the debt will likely stress you out more than you will enjoy it...