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?

@BonBonVoyage I suffered from that too. My parents didn’t give us any kind of financial education, so I was very clueless.

I’m also an emotional spender. Being logged out of amazon helps. Or putting stuff in the basket and leaving it a week. Also we did a budget and then I send standing orders to overpay credit card and into savings, then only have a small amount left to spend each month. I’ve got the savings bug now and get pleasure from seeing debt go down and savings go up, rather than from frittering money on stuff we didn’t really need.

Ok I still haven’t got round to opening the letters. Came home from work Friday with the flu and chest infection and am almost feeling human again. I’m going to tackle them as soon as I feel better. I’m off work Tuesday so I’ve set my mind go that being the day!

I had a letter from my bank saying that my overdraft charges will be increasing in the new year.
I’m thinking of doing a 0% money transfer from a credit card that I have which currently has a zero balance and then doing a direct debit to pay of as much of the overdraft as I can within the interest free period. I will reduce my overdraft limit at the bank to £100 so it’s just there for emergencies and to prevent using an unarranged overdraft.
Are there any pitfalls with this idea? Anything I haven’t thought about which means it is a really bad idea?
At the moment my overdraft varies between £200 and £1200 depending on the time of where month. It feels like a neverending debt. I’m currently paying about £30 - £40 a month in overdraft charges and feel I could be using that £30 towards actually paying off the debt.

We have done overdraft to credit card before. It only works, imo. If you then completely close the overdraft.

Mine will low me to go £10 overdrawn which is the max without incurring overdraft fees or interest.

It worked when we did it that way, but not when we left the overdraft available.

I'm in, will be back to post properly later.

Debt is about £500 on store cards, about £5k on interest free cards.

Thanks whirlwind. I was planning on reducing the overdraft to £100 as that is the interest free limit and will cover the majority of my direct debits if I ever forget to pay something. I feel really nervous about having no overdraft at all for some reason.

I still have a £300 overdraft facility on my bank account even though it is not used these days. Silly really but it costs nothing and if direct debits hit before pay goes in then it's a bit of a safety net.
I suppose you could create your own safety net by always having a certain amount in the account.

Paying off overdraft is a good first step as then you can run the budget based on what comes in and what goes out and the bank balance will represent really what is in there.

I think having a safety net amount in the account would be three ideal situation but in reality I know I would just see it as available cash and slowly work my way through spending it so I think I am better working my finances so that I use just the money I have coming in and don’t touch the very small overdraft unless in an emergency.
I do have overdrafts available on other accounts and never dip into them. The problem is just my main account. I personally find it harder to reduce my overdraft than I do other debts and I’m not entirely sure why. Maybe it’s because the amount I am overdrawn fluctuates so wildly so it isnt always that bad IYSWIM?

Me and DH took out a loan (with very cheap monthly repayments over 4 years) to pay off all our debts on store cards and credit cards and put the debt in one place.

£8000 loan -£7000 in Debts paid off and £1000 left to prepare for DD2 due in April and sort some house bits out.

I feel now we have everything in one place like we have our heads a bit more screwed on in terms of not spending money on crap and budgeting for things/looking for cheaper alternatives.

I just need to keep focused! Having the next account/very account/Argos account/Debenhams account etc all still there in the palm of my hand are big temptations, especially with the looming sales.

I just need to keep focused! Having the next account/very account/Argos account/Debenhams account etc all still there in the palm of my hand are big temptations, especially with the looming sales.

Is there any reason you can't just close the accounts?

@RedDeadRoach because with a baby on the way having an account can mean discounts on certain things.
It's being sensible with them and having control.

Bit of a sarcastic comment?

@MUjunkie
Open the letters now. Tell us what is in them.

@yesmelord
I am a big fan of closing accounts you do not need, especially store accounts which have crippling interest rates if you miss them by a day

totallyclueless
How are you going to get the money from your card to your overdraft
as I believe most cards exclude caash withdrawals from all deals

No it wasn't sarcastic. Genuinely, if you think you're going to overspend do you really, really need those accounts? Next and Debenhams in particular are expensive. Does the baby need new brand new stuff from those outlets even if they are a bargain? There's loads you can get for a baby second hand and lots of it will still be in new or nearly new condition because they go through stuff so quickly. The only thing you really have to get new is a car seat and a mattress. If you don't have a line of credit open you can't use it. I thought it was worth thinking about.

If I'm. We have £9,565 on a credit card (statement in today), and £3,000 IKEA loan following a big house project this year. Both 0% but on top of a huge mortgage. Cash flow is very tight.

We're not really 'doing' Christmas - nothing for one another, small gifts for our young DC and secret Santa for both families. So not much to buy thankfully.

We both earn well but have ended up on a stressful hamster wheel of having to work really hard just to cover our outgoings. Youngest gets her free hours from sept 19 so that's when we can pay more than minimum amounts off, but until then looking for all tiny savings to throw at the debt :(.

@yesmelord I would also really recommend closing those accounts. The interest rates on them are horrifying. And any “saving” will be recovered by them through the interest.
Babies don’t care where their stuff comes from, it’s the perfect time to be frugal and use hand me downs/ second hand stuff

Welcome Definitely
It sounds like you have a handle on the debt.
Do you have an up to date family budget ? Is it helping ?
And yes, as soon as free nursery hours kick in, life gets a lot easier.

I have a few Talk, and I'm constantly playing around with them to see if there's any wiggle room. There's not really. The one real extravagance we have (and we are generally very good at not eating out, buying coffees etc) is a cleaner. But I call that my 'mental health tax' as it really does make me feel so much better ashen we're both working so much. Have been looking at the organised my

Gah - posted too soon.

*when we're working so

Definitely
My sanity spending is the gym. I refused to cancel it even when we were broke

FFS.

Anyway, I've looked at the organised mum method but I'm not sure I could ever keep on top of things in half an hour a day.
Plus having a cleaner really makes me properly tidy once a week. I know it's an indulgence though, and I will cut it out if I really need to. I have about 20 months left on the CC so need to pay more than I'm paying now. Ikea will be cleared in about 25 months I think. Feels like forever.

Exactly Talk! Luckily my exercise is running (badly) so at least that bit is free!

talkinpeace my card offers a money transfer option - similar to a balance transfer only it transfers cash into my bank account for a 2% one off fee and then it is interest free for 18 months.

MSE explains it better than I can

A money transfer card is a type of credit card that pays cash straight into your bank account. They allow you to borrow at 0% interest for a set amount of time, but charge a fee to do so. When applying, make sure you ask the lender to transfer the money into your account – DON'T withdraw it as cash

I’ve just had quite a nice surprise today, Barclaycard have been over charging me in interest, so have refunded me over £700, taking my £1500 debt down to under £800.

totally
in that case go for it

beefstew
NICE