A support thread for people paying off debt #2

[moneyworries9]

Hi all... hope you manage to find the thread?

The last one seemed to be such a success 😃 I will be honest and say that I haven't cleared as much as I would have liked but I know if I hadn't been on here, the debts would most likely have increased rather than decreased. I currently owe

£3,355 - loan
£1,600 - credit card

We do have some cash in our bank accounts. I'm in the process of paying for driving lessons so have about £1,000 in our current account, most of which is to cover that.

On the plus side, when I started the other thread, I had around £2,500 on my credit card and £3900 loan so I'm taking baby steps in the right direction.

The other thread was a huge source of support and motivation for me and I hope that this one will be for many others.

Feel free to give a quick summary to introduce yourself

Just added everything up that I owe and in total it's £4090. I'm going to check in every month and write down the new total to keep me motivated as I pay it off!

I’ve been lurking on these threads for years I finally want to post to keep myself accountable coming up to Christmas. I started the year with a €13500 loan and maxed out on over draft and credit cards to another €2800. I got the loan down to €4500 but just kept getting sucked back into the cards and over draft so I’ve added €2000 onto the loan and cleared the overdraft and one card and got the other one down to €300 balance. I will chip away at this balance over the next few months and it’s only added an extra 3 months onto the loan. All going well this should be completely gone by June and then I can start saving for a deposit which is the main goal.

Please can I join?

No credit cards, but two loans. One up in April 2022 and one up in November 2022. 1 x £123 a month and 1 x £163 a month.

Overdraft of £1k and always in the bottom end of it, sometimes overdrawn on that. Costs roughly £30 a month.

I owe HMRC overpayments of £950 but not sure how much is left on that - am paying £10 monthly.

I also have a BNPL catalogue that I owe on.

I earn less than £1k a month so I’m always scrabbling for every penny, but I’ve started taking control a bit now instead of burying head in the sand!

I use Plum (started in September) and am saving roughly £40 a month on that. I have the HMRC help to save account too.

I want to try and pay off things, so was wondering how best you would do it? I’ve got £22 left on my handset and once I’ve paid that I can go sim only, taking my phone bill down from roughly £45 to £12.

Is it best to pay off the smaller stuff first and then use the savings to pay off the bigger debt?

You should pay off the loans with the highest interest rate first, if you can.

That’s what most people seem to say!

What do people think about savings? I’m so scared of something going wrong with my car, for example. It’s an 06 plate and I commute a 50 mile round trip to work and we live rurally. I can’t live without the car and feel the need to have savings, but then I think, shouldn’t I be using that to pay off debt?

Molly I've seen some PPs on here earlier say to not bother with savings as you're not earning much on it, and paying more in interest on loans, credit cards etc. I like to have a bit of a cushion and do have savings, not as much as I'd like, but something to go towards bills if its a tight month. I do occasionally have to use it, but try not to.

Is anyone else getting pulled into the Christmas spend? I’ve just spent half an hour scrolling through stuff and putting things in my basket until I have my head a wobble

I have started getting little things, but I also don't shop online, as it's too easy to spend a lot and I don't like waiting for things to arrive! I still have to get wish lists from dc and dh, but we've already planned to not spend much. The main gift (a family gift) won't have to get paid for until next year. It's an event in April and we'll book the tickets closer to the time.

I can’t wait until DS is old enough/mature enough to understand the concept of experiences as presents. He’s three and we’ve never gone over board with him but I do like buying people presents

It does get easier as they get older, although what they do ask for tend to be a lot more expensive! I do enjoy buying for others as well, but I'm restraining myself this year, planning to bake cookies, bread and make truffles as gifts. I have most of the ingredients on hand already, it's just finding the time to do it.

Reporting In.

I've done a lot better this month, been really careful not to splurge after the disappointing lack of progress last month.

Debt is technically £8,870 but it's payday tomorrow and there is still £270 in the bank account so I am going to put that £270 into one of the Credit Cards as soon as I confirm the wages are in my account, so we can call it £8,600 so long as I remember to do that.

I am not expecting the debt to go down much in December - I will make sure I pay the minimum but any extra is likely to get spent on Christmas Presents etc.

I have been finding this thread really helpful though. It's easy to just let debt sit there - especially with a 0% deal - but feeling like I have committed to posting my progress every month (even if I miss some occasionally) is helping me to feel I need to put in the bit more effort to get the payments sorted.

Higa nice progress! Every little bit helps for sure. Remember there's more to Christmas than just presents (although food and drink adds up quick too), try not to spend more than you budget for. I find if I have lists of things to get people that I know they will like, I spend less.

We are still chipping away at our credit card debt, dh also picked up a detailing job at his work and all that extra will go directly on the credit card. I have yet to be paid for my second job I just started, but the same applies to my extra income. Plus it's in retail and I get a discount so that will help for Christmas. We have 2 more payments on one of our vehicles then that's paid off, 5 more payments on the 0% card. I feel we're starting to make some progress.!

Just a heads up that there is very good advice on moneysavingexperts 'Debt free wannabe' forum.

I have lurked on these threads for a while but didn't feel I had anything to contribute. But this morning I paid off the last of a credit card debt that has been hanging over me for a while. Like years. And it felt so good.

I still have another one to clear, but it is coming down and there is light at the end of the tunnel.

I just wanted to share my good news with people who would understand what an important milestone it was.

I did it in a way that I know was actually 'wrong' in that I saved up and cleared it in one go, rather than paying off little and often to reduce interest. I know that what I did ended up costing me more money, but I had tried the other way so many times and just didn't seem to get anywhere. Psychologically I was able to focus better on saving than on repaying.

Well-done isabel..
With your other debt, set up a standing order to pay it monthly ( when you would save ) & let it run..you can save on the interest this time.

I just had my first month where, on payday, I still had money in the bank and have not used my credit card as a buffer for the last skint week - feels amazing, I'm almost ready to close that card down completely (it's at 0, the other 3 are being paid down and don't have contactless or PIN number for them) Little win for me!

That’s fabulous news @QforCucumber, well done. All that hard work has really started to pay off.

I’m here at higas invitation, not sure how I missed this thread before. I’m near the end of an £18,000 debt, the last £1000 will be paid by Christmas.
I have to build my savings back up, so I’ll treat it like a debt to myself? Is that the attitude?
I have a thread opened yesterday [[https://www.mumsnet.com/Talk/legal_money_matters/3754112-Debt-free here]], for a bit more context :)

welcome to the thread @SeaSidePebbles - I found the advice in your own thread useful too - it hadn't occurred to me that I mustn't treat my 0% deals as if they are interest free and don't matter - they are always only interest free for a set period and come with a (usually) 3% fee so that fee is actually a fair chunk of interest by a different name.

I have been channeling some of my spare income into a savings account as well as paying off my Credit card balances but I am going to reshuffle that. there's no point having money sitting in a 2% interest savings account and also paying another 3% to transfer a balance to a new 0% deal when the introductory rate runs out. so I an going to stop saving temporarily and try to accelerate getting the debt paid down (I am working towards being debt free by Autumn 2020 - then I really really need to start getting serious about a pension but that will be a different thread!)

My bank does a thing where if you use your debit card then they will round up the total and move it across to a savings account.

IE: you spend £4.98 on your card and the bank will move 2p across from your account to a savings account.

At the end of the month I usually have around £20 give or take, sometimes more sometimes less. I use that as an additional payment to my CC etc.

Is anyone else here on a DMP? Have just started one, for debts around £12k. Pretty depressed about it.

BarrenField
DMPs re steps forwards
use the protection it offers to change your spending habits and it will turn out fine

Debt Free Christmas
(a) Children under three will remember nothing about it later - so get them a few simple things that they will enjoy all year
(b) Children want your time and attention FAR MORE than they want stuff
(c) Pets do not know its christmas, save money
(d) Give gifts because you want to, not because you feel you should
(e) DO NOT go into debt to give gifts - as then they will make you sad not happy
(f) High quality second hand is better than cheap new

Checking in for this month.
Electricity debt - £1022
Loan - £1285
Credit card - £795
Overdraft - £700.

Total £3800, £290 less than last month even though I had to pay an unexpected bill on the credit card. I'm happy with that.

I've told everyone I'm only buying presents for DS this Christmas and no one else. I'm getting his main present second hand.

Can I join you. I'm totally ashamed at my level of debt and want to be debt free in the next 3 years

Current debt is loan approx £7800, car finance £3200 on 1, 15 months to go, £5400 on the other 54 months to go, total credit card debt £5000, HMRC £800, Argos £500 and approx £500 small debts.

I'm ashamed that living beyond our means has caused this and it's time to reign it in

We're currently paying £700 to service them. It's making life difficult but we're just managing.

My first aim is after Christmas going back to a cash payment only lifestyle. I'm also going to work out a budget. My first aim is to clear the niggly small debts that seem to coat a lot per month the next aim is to clear my high payment car loan which will mean my car is owned outright which will be worth £4.5kish.

Then credit cards, then the loan. Would that be the best solution. Over paying in credit cards on car loans may not be possible while forming out large sums on small debts