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?

WhataBloody
So long as its his only 30th birthday trip, you'll recover.

DH and I have just been out for his 54th birthday supper - we are old !!!

Quick update..2 weeks in & amazingly going very well,frugal &thrifty at its finest at our house at the moment,house decluttering all done,credit cards changed to 0% & started paying that with standing order X changed bt internet today to post office as it's a third of the price,still cooking from scratch,biking all over at the weekends with the kiddies(we've had good weather .....counted up the left overs from shopping budget & extras & what was left from my budget & I'm £183 up!! Crickey thrifty living is bloody great X plus only Xmas in the record of history that I've lost 8lb???? It's allthat walking & biking 😂

I must also be honest in saying though that I've not been to one January sale,only thing I've been allowed to buy is food/toiletries we need X so that explains my left over amount plus no takeaway food,my kiddies aren't keen...thank god .I have made two takeaways on Friday nights though,homemadempizza,couldn't have cost more than£1.50, & a curry for us all with left over chicken😂my relatives think I've gone mad,turned into some new age hippie X I did tell them I was going to have a look around our local charity shop though when we needed something😮. X

casteil
But the fun thing is that you start to feel you are not missing out
but finding out new things
and yes, eating and living mindfully will massively assist on weight loss
(I have a stone to lose by the end of February. I go back onto the 5:2 threads for willpower)

Can I join?

1000 on credit card
800 bank loan (was 10000, nearly paid off - proud of myself!)
Student loan which robs me of £60 much needed every month

Doesn't seem like much but with nursery fees, maternity leave and other living costs to factor in, it's not exactly ideal. Credit card is the big one :(

Hi there Bonnie
Is the credit card on a standing order ?

The student loan will pause when your ML earnings drop of course ....

I've done well today, sorted out my bank, got a spending account and DD account and a saving account sorted, closed all the empty floating ones. I also did the weeks shopping for £44 which is about £120 cheaper than it had got to last year. 😳

@Ta1kinPeace nope.... should it be?

Hi Bonnie
I always suggest that people move cards across to standing order as then the amount you pay is the same every month and the repayment period for the debt drops from around 18 to under 3 years

Squash
Nice bit of mindful shopping there. Well done.

@BonnieBright well done for paying off almost all your bank loan

Just checking in so that I keep in touch with the thread and keep motivated towards paying down my debt

Hope you're doing well with it all TotallyClueless.

I have £400 to last until the end of the month but a few occasions over the next couple of weeks that will make that challenging. Just trying my best to keep plugging away 👍🏻

Just catching up.
My two balance transfers finally finished completing today! I need to wait for my first bill now so I can see what the minimum payment is. That way I will know how much I can throw at the others.
I have opened a new savings account as well. My plan is to try and put away every week the maintenance I get from my ex for the kids. At the moment it just gets swallowed up into my account and goes towards whatever.
I am trying an experiment to see if I can try and use it solely for things for the kids - dinner money (they only have dinners once a week!), paying for clubs, school trips and clothes/shoes etc. I'm not sure how it will work yet but I am going to give it a try.

Hi all - super impressed with your bank loan work bonnie!

We're doing well keeping it frugal. Thought I'd mention tidying up with Marie Kondo on Netflix, if like me you never got around to reading the book. It's a good watch, and it definitely seems like another good way to approach how you spend money... Knowing what you have already and being able to find it easily is a big thing.

Fallen off the wagon a bit this week . Bought new shoes and two new handbags. Admittedly it came in at less than £100 total and they would have cost about £500 at full price, but it is still money I could have spent on overpaying credit card / mortgage.
I did need new flat shoes (for work), and my big hand bag was almost broken. The other little handbag was to replace one that I bought with vouchers and it broke within a week so they refunded me in cash and I hadn’t found a replacement until now. But I do feel bad. I have got completely out of the habit of spending money like this and I don’t want to fall down a slippery slope.

Can anyone advise me on my loan please?

I have a 13k loan that I pay off at £400 a month currently with my bank, it was a top up from a previous loan that I was very close to paying off.

I can pay extra anytime I want.

We're hoping to save £1k a month (starting from zero)

I was wondering if it would be wise to save a smaller amount and make extra payments to the loan to get it paid off quicker? (£500 savings £500 loan?)

We also have catalogue bills so maybe I should keep the loan payments as are and save less and pay off those first. I hate having debts!

Titsalina
Catalogue debts - what are the interest rates on those ?
Are they less than you will be getting on the savings account?
If not, pay the debts BEFORE putting anything into savings.

Same with the loan.
The interest that you will save by paying it off early dwarfs anything you will get in a savings account.

And the same goes for aleC4

Try to have some headroom savings rather than an actual account.
WTF are headroom savings you ask

If you have a credit card limit of £4000 and the balance never goes above £1000 then you have £3000 of headroom savings - you can pay for emergencies when and if they arrive
while simultaneously hammering down debt.

When all debt on over 5% has been cleared, THEN its worth setting up savings accounts - to stop you spending extra.

twerk
I have to admit that I do not "get" handbags.
THE fact that they were £500 ticket price just shows the insanity of brand pricing, not that you got a bargain.
BUT
Price them in terms of pence per usage ....
once an item of clothing or accessory gets to less than 50p per time its used, you have value for money.

eg I often spend £50 on a swimsuit, but I swim up to 5 days a week so the pence per wear comes out at around 10p

Can I join this thread please. Determined to clear off an embarassing amount of debt that's been saddling me for years

Hi there lannister
Give us the gory details and lets see if we can work out a plan :-)

Can someone just very simply explain the standing order truck please?

copper
the Standing order trick
If you pay the minimum on your card by direct debit each month, they take a percentage of the balance every month
so the amount you pay reduces slightly every month
and the bill will take up to 20 years to pay off

if you fix the repayment at what you paid THIS month
and pay that same amount every month
you will clear the debt in less than three years

no pain, lots of gain

Copper a lot of credit cards will only give you the option to pay by direct debit, either the minimum payment or the full amount. By paying the minimum payment, it can take decades to clear a credit card balance as the bulk of the payment only covers the interest. The standing order trick means you cancel the direct debit and instead set up a standing order with your bank and make sure you set it up to pay more than the minimum payment. By doing this, you can clear debt in a couple of years rather than close to 20 years.

I hope I've explained that right.

Talk seems to be very knowledgable with this sort of stuff so may be able to better explain.

Ahhh cross post with talk

moneyworries
I am delighted that you explained it as well.
The more people who understand and tell their friends about it, the more people will be able to get out of the cycles of debt.

I worked it out about seven years ago (hence the spreadsheets)
the FSCS cottoned on last summer.
It is the way to go.