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?

I don't know how I missed this thread.

I'm on MN regularly (name changed for this) but it only just popped up on my iPad for the first time this evening.

Can I join please?

I have £4,691 (most recent statement) on a credit card that I am desperate to clear. I ran it up in the most stupid way - I could actually kick myself now. I'm self-employed and I provide services and goods for clients. I pay for the goods and then recharge them back to the client along with the service on one invoice.

So what I've been doing is paying for the goods on my credit card - the theory being that when I get paid by the client into my bank account, I keep the 'services' part of the invoice as my earnings, and then repay the credit card for the 'goods' part.

The problem is it hasn't quite worked out like that and some months with cash flow and so on, I haven't been able to pay back as much on the credit card as I should have, and the balance has gradually crept up, with interest of course!!

The stupid part is I had the means to pay from a different source, but I just thought - set the credit card up on PayPal, pay it off each month and it's all hunky dory. Only it didn't work out like that. I can't believe how quickly it's mounted up. I've gone from zero balance to nearly five grand in two years!

I twigged a couple of months ago where I was going wrong and have stopped using the credit card, have had no transactions on it so far this year and the balance is coming down but I want to clear it as quickly as possible.

I've had a very laid back attitude to money all my life. Never bothered if I was overdrawn etc. - after all I'm self-employed, run my own business, it's par for the course, no big deal.

It's like I've suddenly woken up.

So I'm doing a complete (much needed) overhaul of my finances and am looking to make economies in other areas - so I'm going to have a good read around this part of the forum.

Top of the list for me is to pay off this card asap and I aim to get it cleared by the end of the year. It will be a big ask as I don't earn a huge amount and like everyone have monthly bills etc. but I'm determined to do it.

Hi there Frugal welcome to the gang
Standing order trick is your friend - it will make sure that you hammer down the debt
and then yes, you need to budget really tightly
to make sure you have the money to pay your SA bill

Yes I've been reading this 'standing order' thing but I can't make head nor tail of it.

I don't pay my credit card by direct debit. I pay it manually each month and well over the minimum payment. So how would the 'standing order' thing help me?

Also bear in mind I'm self employed - never know when I'm going to get paid so don't really want a regular hefty dated payment going out of my bank account.

Frugal
If you are paying over the minimum then its less use to you

A jammy method is to set up a standing order for just above the minimum so that you can never miss a payment
and then pay extra on top

Cashed out an old fixed savings account so have managed to pay £450 off my CC balance so its now under £250.

I cant remember if Natwest will still take the DD now or whether they will cancel it as I have made over the minimum payment, but if they don't I am still going to pay it. Its going to be a tight month but I have to keep a lid on things and stay determined.

Now under £2500.

Wishful thinking!

Gandolf that's great progress!

With my credit card, they still take the direct debit even if I've already paid manually over the minimum, so definitely worth preparing for them taking it.

Good news for me! DH's payslip is through for his pay at the end of the month and it's all been sorted. So he'll be getting the extra from last month. Such a relief.

We have a really expensive month next month. Going to a friends wedding so have accommodation/food to pay for for 2 nights. Also going to be travelling to visit all our family which means meeting 3 new babies and buying them gifts. We also have a christening to go to while we're there. It's going to be an expensive month so I'm going to just try to be as frugal as possible. I'm also now paying £175 each month until June for the accountancy course I signed up to so my progress with paying debt off is going to be a little slower but I'll just keep chipping away at it.

moneyworries
So glad that Crapita finally got his pay slip sorted.
Gifts for babies - go traditional ......
silver napkin rings will last them a lifetime ....
buy them second hand
and then get them engraved at a trophy shop with the little one's initials
should come in at under £20 per kid

accommodation / food : if you are on a B&B rate, eat everything you can at breakfast and skip any meals you would have to pay for separately
incurable tightwad me

Right as one of my first money saving efforts, I am shortly off to Aldi to do a proper weekly shop.

I have a large Tesco at the end of my road, and it's so easy just to pop up there. In fact because I'm desk bound, working from home it's a good way to force myself out / stretch my legs / cycle, so I don't mind 'popping' up there almost daily.

The problem is if I go for say bread and milk, I end up with loads of other stuff, so £15 here, £20 there, but never a proper shop. I've realised it's costing me a fortune when I look at my bank account.

I've got a super Aldi about five miles away and I've shopped there before and saved shitloads (savings on virtually every product), but it's more off a faff to get to, time wise and traffic wise.

But starting this week I'm going to do a weekly shop ONLY. Work out meals for the week and my son's work lunches and get it all in one go. No more 'popping' up Tesco every day and impulse buying.

Then I'm going to take myself out for a cycle or walk around the park every day instead of using Tesco as a raison d'être for exercise. I've literally got a park outside my back gate, so no excuse and it's free!

And the fresh air will do you good :-)

I have just used Look After My Bills to get a better tariff on my gas and electric, they do it all for you for free.
Npower wanted £20 more a month. This company got me a deal £2 less a month than I'm paying now.

Thanks for all the advice Talk. The napkin rings are a great idea and we have breakfast included with our hotel so will be filling up as much as we can then. Plus planning to pack snacks for the kids 👍🏻 will be as careful as we can be.

So pay day and bonus this week. No news from insurance, has gone to underwriters, but hoping I only need to pay the £250 excess for repairs or otherwise will be around £1000.
Otherwise, had a good month paid off a chunk to debt and lived within budget. I joined the gym, as my weight and mh suffering but see that as an investment.
Just need to keep it up!
How are you all doing?

Good positive steps you're taking there coffee. The gym will be a worthwhile investment for you. Hopefully you'll hear from the insurers soon and I hope it's good news 🙏🏼

I'm doing okay. Not looking at the credit card balance just now because we've had to live off it this month because of the error with DH's pay. It won't be a true reflection of where we are actually at with our debt so I'm ignoring it for the next 2 weeks 🙈 definitely living frugally though so I'm happy with that.

Hope everyone else is doing well

Thanks @money.
As you say, that number on your credit card is not a true reflection of where you are. You're living frugally, so you're doing all you can in the meantime.
I'm also working overtime, but equally trying not to burn out. It's a fine balance.
I'm really pleased I am facing it. For too long I've card hopped. Just let the minimum come out and forgot about them. Then built up on a card I can 'see' and paid off. I've now cleared that one and am going to start paying lumps of the next one.
Praying the insurance pays out.

It is a massive mental leap moving from debt living to being debt free
but its worth it

So, it's hard hearing everyone book their summer holiday. I have my bonus amount and it's not as much as I thought but still good. A lump of that will go towards cc and will keep enough back for excess/towards roof

Just found out I need to find another £225 to pay out each month

Dammit

Sometimes I dispair of ever getting out of debt

So, it's hard hearing everyone book their summer holiday.
If its any relief I've booked nothing.
Easter - because of Brexit
Summer - because I never book far in advance and I like to make sure I have my spring earnings in the bank before committing to anything.

And ask yourself how many of those holidays will take them years and years to pay for

Coffee

Also... think about how amazing it will be to one day be out of debt and be booking a holiday with savings. You won't have that horrible feeling that you've spent money you shouldn't have. You'll have no guilt over it. Just pure enjoyment! We will get to that point and it will be so worth the sacrifices we are making right now.

Bob inks is it every month for the foreseeable future that you'll have to spend the extra £225? Or is it just for the time being?

Are there any other direct debits that you could be paying less for? Maybe sky, utility bills or anything else like that where you could either try to negotiate the price or change provider?

I'm a strong believer in trying to keep monthly outgoings to an absolute minimum. If you can't do anything about the £225, look and see if there is anything else you can change.

My Aldi shop on Friday came to £54 and that included washing powder, washing up liquid, bleach, shampoo, conditioner, shower gel and a giant pack of bog rolls. I've got a fridge and a freezer stacked with food and the cupboards are full. It's now Tuesday and I haven't been to the supermarket at the end of my road once yet. By now I'd have probably spent that £54 with my daily trips to Tesco, just frittered away on bits and bobs.

Will be interesting to see how far the Aldi shop goes.

Since I've started taking more care of my finances, I am also working harder (self-employed) ensuring I've got jobs finished and money coming in. I could be a terrible skiver sometimes, coming on here, youtube videos etc. - all when I should be working. I'm also keeping a record of how much profit I make each week which is a real eye opener.

Anyone who works for themselves knows it's either feast or famine, and this is one of the reasons I got into the habit of using my credit card to make client purchases - because the funds were always there (albeit borrowed funds at a very high interest rate)!

So for example three weeks ago my profit was £560. The following week it was £315. Last week it was only £135 (although there are jobs that have carried over into this week) and so on. I want to try and even that out or at least ensure that on lean weeks / months, I have the back up funds there to tide me over without having to resort to using credit card.

moneyworries its not forever but perhaps for two or three years. I'm going to try and get it reviewed and brought down. I'm pretty frugal I think with most other outlays, but its a good suggestion so I will have a look.

I think basically it will mean I won't be able to pay off CC debt and may end up putting a bit more on it, but will keep going with the SO trick and think I can budget for that OK.

Just a bit of a knock back yeserday as I've been feeling like I've been making some headway over the past few months. Ahh well. Not the end of the world.

I meant - won't be able to pay off the CC debt so quickly

bobinks
A variant of the standing order trick is to set the standing order at 5% of your total credit limit
that way unless you are maxing out the card every month, you will be hammering through the debt, even while using the card.

Frugal
I've just been doing DH's and my credit control ... making sure that all work is billed as soon as its done and all clients pay up in good time.
Cash is king after all