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?

Can anyone recommend a budgeting tracker and debt tracker. I have tried Yolt but would prefer one on my laptop rather than an app! X

Thank you for all the advice on here, I'm determined to get our family debts under control next year, come the new year we will owe approx £5500 on a credit card and £5k to my parents.
I'm going to check out the apps and spreadsheets recommended!
Thank you!

rayn
Have you looked at youneedabudget
or download my spreadsheet

Talkinpeece

Thankyou - the spread sheet is fab x

Can I join ?

We currently owe about £14500, £4000 is to parents the rest is on cards and a loan.

Most of this is car costs, and stupidly overspending to make us feel better after 3 miscarriages and we spoilt ds to make up for him being an only child ( no need to do this I am one and am fine ) we were not expecting to have to deal with the costs another baby brings and another maternity leave as we had given up on the idea but ds2 is now almost 18 months and we had lots of fun while I was off work but now it’s time to sort out our debt.
The ironic thing is I work in debt advice

loz12345
Tee hee about your job.
Standing order time

I calculated that I paid £27 in overdraft charges last month and every month is similar. I am going to sort the moneuvyransfer this week as the one off transfer fee will be less than a months overdraft charges and when I will be saving £27 each month which I can use towards paying the money transfer card off.

@MUjunkie did you manage to open the mail today?

Just totted up the cc debt - all on 0% and dd are setup to pay back enough each month so that by the time the 0% ends, we will be clear. However it's 14.5k that's 6 cc and all ending at various stages (May 19, 3xJune 20, Feb 21, Aug 21)

What's the best way to tackle this? If we can cut back in other areas which card should we put it towards? The one finishing earliest or the one we are paying the lowest amount on? Hope that makes sense..

I’d guess at paying off the one that finishes earliest. Then if anything happens that affects your ability to overpay you are minimising the risk of starting to pay interest on it. As soon as it is paid off you can push all those payments on to the next card to finish.

agreyrock - When the final payment has gone from the one ending May 19, the money you were paying to that card can now go towards the other cards. So you could then recalculate the end dates on the other cards. Then do the same thing again when the next one ends. That way you will pay them all off and should be completed before August 2021.

If you feel your emergency fund needs a bit of a boost, you could do that June 19 for a few months (just a few, you want that money to speed up repayments on the remaining debts as soon as you can) with the money from the card ending May 19. Having a financial cushion is really helpful to stop you ever taking out debt again.

During feb and March we don’t pay any council tax. I plan to put the amount I usually pay towards my debt repayments. That will be over £370. Anybody else on a 10 month council tax schedule planning to do the same?

GOOD IDEA

Yes good plan totally. I find anything like that where you can make a good dent and that helps it feel like the end is closer!

For those who wonder / don't know by the way.
I was up to my eyes in debt for 15 years.
I've now been debt free for 20 years and mortgage free for 8 years.
But I remember viscerally what it felt like
hence why I do my best to help others not make the mistakes I made.

Drunk shopping one Christmas time took me YEARS to sort out
Be careful out there

I’ve twice had to climb out of debt. Once was my law school fees which I paid off really swiftly, huge chunks each month, and I was so glad I did because I then became very ill and had to leave my job. And secondly this time, from legal fees from a really tough divorce from my abusive ex. My cc debt was at £8k plus I had £2k of tax credit overpayments to pay back (despite sending all info to HMRC!). 18 month’s later I am at £2800 left on credit card and £1000 left with HMRC and my goal is to pay it all off in the next 2 years. It is all at 0% so I am building up some savings slowly too. Once the debt is paid off I want to transfer those standing orders into a standing order for mortgage overpayments instead.

So good to hear some positive stories from people who have been able to come out the other side. It feels so far away right now 😩 but hopefully I'll be there sometime and able to say I came out the other side.

This months not looking great!

Our oil ran out so on top of Christmas we had to pay £150 for a minimum order. I was hoping it would last til January. I had paid £100 off my cc so that's straight back to close to maxed out

Putting a positive spin on it, it's making me more determined to get a cushion going so unforeseen expenses don't mess us up. I know oil is not an unforseen expense but we've never had a house with oil before so it's only been on my radar since I started my fudget app and was thinking about expenses that are not monthly but more periodic. So I had factored it in for January but was crossing my fingers that the tank would last.

Question: does anyone use envelopes for sorting money? I feel that if I budget £50 a month for oil, £40 a month for car tax etc and that money sits in my account then it might get spent on something else before we come to pay our 3 or 6 months in advance. If I took out the physical cash each month then it's not possible to spend it (unless of course I break into the envelope)

Any thoughts?

I think I'd like 5 accounts - month to month fixed expenses. Other fixed expenses (car tax, oil, mot etc). Variable monthly expenses (food and petrol). Account for saving for presents through the year and Christmas. Account for saving in general. Account for my "fun money". Account for DH "fun money". I think that's more than 5... Is it 7??

Hi there BonBon
I know some people use the virtual envelopes method
I'm not a fan of cash as its untraceable once withdrawn.
Better to keep a spreadsheet or use and app to do it and leave the money in the bank.

If you have an instant taver account linked to your current account you could use that to manage the numbers a bit more clearly ?

Joining will enter 2019 with 7000 on a 0% card. Needs to be paid off by September 2020. Want it gone by December 2019.

Thanks Talkinpeece . I looked at my online banking and have opened a savings account linked to my current account. So each month I'll transfer the money for oil, car tax, MOT and any other similar expenses that are not taken by a monthly dd. I will open a post office account for saving for Christmas as I think it will be better to have that money somewhere I have to physically go to access it and not a click of a button away. I have an account myself for fun money. Savings can go into the Credit union but we still have a loan to pay back so we should pay that back first?
Is that the sensible thing to do?

wrongway
Do a budget and then you'll get there

BonBon
I go against the grain on many things
but I regards "headroom" on credit card as reverse savings
eg I know that my CC limit allows me to do £n000 as an emergency
and as its at an effective interest rate of 20%
then its a no brainer

I'm a very firm believer that available instant borrowing is far more valuable than savings for those in debt

if that makes sens

Yes, it makes perfect sense, we needed money immediately so we wouldn't be frozen over the weekend - baby and mil both need it cosy, as do I! But it would have taken a good few days to get it out of savings.
It's a good idea to have a card for emergencies