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

@Foxes157 I understand. I got myself into debt living beyond my means too. I took out the loan and overdraft last year to pay for an expensive holiday, thought it would be easy to pay back but it spiralled and I ended up maxing out 2 credit cards and taking out a second loan. All because I wanted things that I couldn't really afford.

I can't believe I was so silly. And now I have hardly any "fun" money left at the end of the month because I don't earn much and I'm paying off so much debt.

I would first find out exactly what you owe, to the penny, and how much interest you are paying.

Then look at your budget, and see exactly what you are spending on.
I also wouldn’t wait until after Christmas, in January an awful lot of people are going to be in your position and wanting deals. And my guess is the bank will have deals, just not very favourable, because they know people have no choice by then.

Foxes,,, list your debts in highest interest first...
Pay the loans as agreed, the lower rate debts at above the minimum set on standing order then throw the rest at the higher interest rate...
Look up snowballing.

Foxes157
You need to focus on interest rates rather than loan amounts.
Chances are that the car is at the lowest rate as it is a "secured" debt.

HMRC bill of £800 will be costing you around 5p a day - pay them £40 a month so they keep the men in yellow jackets

the killers will be the Argos and the little cards - they will have the most interest on them.

You have to focus on reducing the amount of interest you are paying and reduce that
so that once the interest is under control you can pay off the capital.

Make sure all cards are on Standing Orders rather than direct debits.
Car loan ETC will already be fixed.

Unfortunately it's not tenable to do anything before then, my cooker blew up and needed replacing. This is ultimately what has made me confronted the crap. I got turned down for credit. I'm not bothered about ruining my credit rating by stopping interest I can rebuild it again when this is all paid off

I'm going to work out my debt on Friday when I'm off

Luckily all my household bills are up to date and there is nothing I owe in gas and electric so it's mainly unsecured debt

I have approx £2k in the bank for emergencies and hopefully we will have a decent return from a savings plan in 6 months, which will hopefully clear my smaller credit card.

I'm aiming to clear £5k by the summer. £1300 off my car, £1200 credit card, £600 off other car, £1200 off loan and £500 smaller debts and £300 Argos.

This should free me up enough cash to start overpaying on the bigger credit card. Hopefully by £100 a month.

But I'm working my budget out on Friday. It'll mean a lot of reductions in shipping etc but in 3 years time if I'm debt free I can start saving to buy things.

Your cooker blowing up IS an emergency.
Why on earth have you got £2000 rotting in the bank earning nothing when you are paying £££ each month in interest.

Buy the cooker out of the emergency fund
spend another £750 of it to clear the worst of the debts
and then start snowballing the debts

Focus on interest percentage, NOT outstanding amount

I did pay cash for the cooker. I got turned down for credit so there was no choice.

Ok, we aren't paying interest on the £1200 credit card balance. We will pay cone July, HMRC is interest free and being paid at £40 a month. The small debts include my interest free deal on my bed and a couple of bits bought on Klarna.

In fairness I think the only interest is being paid on the larger cc and the Argos account apart from the loans.

I need some cash in the bank to cover car repairs etc.if I was to use £500 to clear Argos that would cover that

I could cash in my savings plans but they pay a decent bonus at the end of the period. Last year I doubled my money plus some and their is a very large one being paid in 18 months. A good result may equal late 4 figures.

Okidokes,
Work out the balance and the rate on every debt and then focus.
Do a budget at the same time.
Check your bank statement for any random direct debits you have forgotten
and it will all come together

A quick check in from me. Havent kept up the thread much recently as I've been working so much, crazy hours. So this year has been tough. I started on the thread with £11913 and currently have £2769. Christmas is also paid for.
I had a lightbulb moment and wanted to turn it around. Have been lucky in that some good opportunities have come up at work. when I initially started I felt quite low however feel much better now and dont want to slip back into being frivolous. Hoping to be debt free by around May 2020

Congratulatory firm grip of the shoulder for coffeechoc

Thank you ListeningQuietly. I could almost cry. Not yet though! Will certainly have some celebratory drinks and perhaps some new clothes when I'm done.

So I just wanted to update you so far.. should have 2 more payments on the truck (Dec and Jan). CC1 is sitting around $14,800 (I pay a set $300 a month-will set up auto pmt once truck is paid off as transfers etc already in place to that account). CC2 (the evil one) did get a little ugly at first, went over limit ($10,500) and went up to $11,100, BUT as of today it's down to $9760!! It's a rewards card, which if we used it correctly would be great, but we weren't disciplined and I can't say no to DH!

We have been working lots, DH was able to pick up a little side job and everything extra he makes goes towards CC1. I did get my 2nd job also, next week's paycheck should be pretty nice as I worked a lot last week. Christmas is going to be very light on the amount spent although I'm going to be very busy in the kitchen making the gifts for family and friends!

ListeningQuietly thank you for the tips and reminders for a cheap Christmas - it needs to be less about gifts, more about spending time with family/ friends.

Daeneris well done on reducing the amount owed. Everyone will have to understand, dc come first at Christmas, don't feel bad for not giving anything. I usually go all out getting everybody something, this year Dnephew and Dnieces have their gifts bought already, everybody else will just get my homemade candy (truffles and caramels etc, I think they'll appreciate it though). I'm only focusing on DH and DC this year, feels weird but good.

Foxes welcome! Definitely look at interest over balance owed, as interest can be a killer! I think over both our CCs we're paying almost $300 a month interest! I hate it, but it's a work in progress, and that amount will go down as the balance decreases. If you can get any of the higher interest, lower balances paid off right now, do it, it will definitely help you in the long run and will motivate you to keep going.

coffeechoc I'm still amazed at what you have accomplished in such a short amount of time!!

HungryHazelEyes I've gone very hard at it and on the edge of burning out, made a lot of sacrifices and lived v frugally. Lucky that I've had some good opportunities to make extra at work. It's been hard going and I am keeping the end in sight which shouldn't be too far away. I need some time to catch up how everyone is getting on on here.

Well done coffeechoc. You're an inspiration!!

I am just paying the minimum plus a bit on my cc. Car loan ticking away. I have not been working steadily up til now. And when I do work clients are sometimes slow to pay so my income is unpredictable. I could get only 4 days pay one paycheck but get 11 the next. And I won't get paid for the Christmas holidays.

However, the good news is :
I've paid off €1,300 off the cc, from having it pretty much maxed this time last year.
I have €300 put aside for fuel and €200 put aside for occasional bills (car tax etc).
I'll be paid next week and it looks from checking online like a reasonably big amount.
I will be working more steadily after Christmas (guaranteed one week out of two with the option to pick up other days)
I will be paid more per day

Just had to buy a new car so in £4k of cc debt just before Christmas eeek. Managing to find bargains on the threads on here.
I hadn't planned on ever using credit card but clutch went and garage said car was dangerous and it had a few suggestions on last MOT, we only got £50 scrappage trade in for it
Plan is to pay off credit card ASAP and buy a tiny flat ASAP too as soon as we can scrape together a deposit as we are currently paying £10k a year in rent in a house so drafty we cant afford to heat it.
Hoping to gain advice and inspiration.

A bit of an update. I've reduced Argos debt down to 166. I've paid off the buy Now pay later before due date. So no interest paid. The rest will be paid next month. Along with the 90 of klarna payments.

So that will leave me with 7300 loan, 3200 car finance car 1, 5400 car 2, 1100 cc 1, 3800 cc2 and approx 175 hp debt and 800 HMRC.

Family income 3500.
Housing costs Inc council tax 600
Gas, electric, water 150
TV Inc broadband sky and phones 200.
Pensions sharesave 370
Food household 500
Petrol, car tax, insurance 300
Debt repayment 700
Total 2820

So somewhere we are wasting quite a fair bit of money on holidays, leisure activities.

Time to go over unnecessary spending

TV Inc broadband sky and phones 200
a month
I use freeview and two phones on PAYG and two on sim only contracts and unlimited fibre broadband
total cost per month £75

£370 a month on pensions - presumably that is coming out of pretax income ? If not why not?

But yes, you need to start paying for EVERYTHING on your debit card and think about the difference between need and want
eg
no more coffees out
takeaway no more than once a week
ready meals no more than once a week
treats only when you have done something to actually earn it
tough but worth it

Debt now £8,142 - just over £3000 of that is on a 0% interest rate until early February and the rest is interest free till July. I've been told I'm going to get a Christmas bonus next week and that plus the savings I mentioned before will get rid of the Feb2020 balance. I will then need to put £684 per month into the other card to clear it before the end of August which is my ideal target (though Sept/Oct would be OK if I don't quite manage that). I have been averaging £630 per month paid into debt since April so need to increase it just a tad to reach my goal.

Need to think of something I spend £50 per month on to cut.

pretty impressive
well done

I don't think I'm being particularly impressive. I am very very lucky that I have a salary that is enough to live on and yet have £630 on average per month to put into this. I know some people on this thread are struggling to make ends meet and can't make progress as quickly and can't get the 0% deals that have been so helpful for me. they are a lot more impressive even if progress is slower.

I have been very stupid because I had far too long spending just a bit more than I was earning month by month and letting the debt build up, but this was all on unnecessary luxuries and extravagant gifts and spontaneous but expensive creative ideas, not on stuff I actually needed.

when I first started taking my debts seriously and making changes, I told myself that my problem was that my tastes and preferences are about £10kpa more than what I actually earn, and what I need is a pay rise or promotion and then all will be well. but actually I think this is wrong. I think whatever I earn I will likely want to spend about 20% more than that unless I keep a very tight control over my spontaneous decisions to spend far too much money.

Higa
But on the positive side
you saw the problem
worked out what needed doing
and did not shy away
and that is impressive

@Foxes157, try keeping a spending diary. Get a little notebook and write down everything you spend.

Go to the garage because you ran out of milk and see those lovely chocolate bars sitting their as well so they find their way into your bag as well. Write it down.

Forgot to take lunch to work so pop into the shop for the £5 meal deal, ooooooh! fancy that celebrity magazine, oooh! and they have a bogof on those toiletries I'll just grab some. Write it down.

It's the weekend and little Johnny wants that toy so you need to buy Emilia one as well.

You get the idea. You'll soon find where the odd bits are going.