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

Running total for accountability:
Credit union £10,700
DM £9,000
Credit card £1,600
Car loan £19,000
Total £40,000

That's a lot

I'm not quite working full time but will have more hours in the new year. And my wages will increase.

But DH is not on board with debt repayment. He doesn't see it as a priority and thinks we're going to start making lots of money very soon. But the last 7 years together have shown me that is not the case

My goal: by just keeping up with the repayments I will have reduced cu loan by £2,500 and car loan by £4,500 this time next year. That's £7,000 down. I would hope to pay off the cc too . £150 per month would clear the cc.

So I'd be looking at
Cc £0
Car loan £14,500
Cu £6,000
DM £9,000

This time next year.
That's repayments of £750 per month.

Junespoon
You are right and your DH is wrong
being debt free is worth every moment of the effort to get there

Thanks Listening.
We are getting better at communicating about money and at having enough money for monthly expenses. But when he spends money on whatever then I get annoyed/resentful and think well I should be able to spend money on whatever I want. Bad attitude. It doesn't help

Hi, I was on the last thread, at the beginning. I've been lurking on both. I need to get my head straight with paying off my debts, I'm sick of them.

Seeing you all chipping away has been inspiring.

I have cc debt £3500
Argos £700.
Cc £900.

Interest free on both credit cards and 0% on Argos until March.

Hi all, this looks like a great thread. Thought I'd jump on ahead of the new year for motivation. Can't find a good app so think I'll just try writing everything down in a notebook like I used to do years ago when I managed to live on £5/day!

So between me and other half:
CC1: 1332 (paying minimum of 25/month, it's 0% interest until July)
CC2: 11105 (paying 300/month, it's 0% interest for 3 different amounts all ending various times in 2021 - can anyone explain to me how the different dates/amounts work?)
Furniture paying off: 100/month, last payment March so then will move that 100 to one of the CCs
Paying back family 116/month, ends April 2021

Welcome to the newbies! onetwothree if my calculations are right you should be paying 190 a month on your first CC to pay it off before the 0% runs out. Can that come from your 2nd CC or is the 300 the minimum? Once the furniture pmts are done, add that to your 1st CC pmt and pay it off sooner. You should then calculate how much it would be to pay off the 2nd CC before the 0% ends. Set up a direct debit for that amount (if you can afford to). If not you may need to see about moving the balance to another 0% option. I hope that makes sense. Look up snowball method to get a better sense of what I'm saying if you need to.

Annonymiss123 Tue 30-Apr-19 18:17:04
On 20/4/19 I wrote:
CC1 = 1,773.68 (min payment this month 43.34)
CC2 = 2,573.43 (min payment this month 56.58)

I usually try to pay the interest amount plus 100.

Today I started my snowball so instead of paying an extra €100 against each I paid

CC1 €250.34
CC2 €60.58

Even though CC1 has the lower outstanding amount, it’s more important to me to clear that first. I now expect to have it cleared by the end of December at the latest, at which point I’ll be transferring the payments to CC2 and hope to see that cleared by the end of next year.

THANK YOU for teaching me the snowball method!!

Made my final payment against CC1 yesterday an am now transferring the “snowball” to CC2. 👍🏻😀

Joining the thread in the hopes of starting the new decade with a plan to clear this debt and be a bit more fiscally responsible. I run my own business so income is varied and I have also ploughed a great deal of money into the business in the last 18 months, mostly through personal debt. It's all part of a wider business plan but does mean that our personal finances are very tricky at the moment.

So current debts - prepare yourselves :
Family £1,400
Credit cards £31,085
Personal loans £26,431‬
Finance for new doors £4,084
Car finance for 2 cars £24,444
Overdraft £1,853
TOTAL - £87,897

Roughly £30,000 of that is debt incurred on behalf of the business to purchase assets, which is being repaid monthly. I would say over 1/2 of the debt is interest free, with the remainder being at interest rates less than 4%. The only exception is the overdraft, which is what I will be focusing my efforts on to begin with.

So in terms of goals, the debt I want to repay is:
Family £1,400
Overdraft £1,853
Credit cards £31,085

The finance and loans are all on 0% or low interest fixed rates with repayments set up already, and due to end in the next 4 years.

My immediate goal is to cut down on our expenditure, and I've put together a spreadsheet with all our outgoings on it. We need to curb our spending to match the £400/month we have available to spend on food and pretty much everything that's not a bill, or fuel. That way we won't get into further debt.

After that, I'd like to build up a small savings cushion of £500, after which I will begin repaying the overdraft. Once the overdraft is repaid, I will increase the cushion to £1000, and then focus on repaying the family member. Once that debt is settled, I can really focus on the credit cards and start with the ones with 0% deals ending soonest.

Written down it all feels very big, and scary. But I am incredibly good at being frugal and focused when I need to be. I just need motivation and accountability, which I'm hoping to get here.

(PS. does anyone have a higher outstanding amount than me?)

Hi everyone,

This is my first post - being in debt can be very isolating so it's because to know your not alone!

Depleted my emergency fund so need to rebuild over the next few months.
OD £1350
CC- £960 pay £25
CC 2 - £2532 pay £120
CC 3 - £3632 pay £72
CC 4 - £6809 pay £120

Great tip on setting up standing order.

NC again but I wanted to check in and say I have paid off 50% of my cc bill this year. I paid £150 today so it'll be a nice even £1,500 paid, £1.500 still owed as soon as that clears.

I have money aside for oil and electric bill and for car tax in March.

Outstanding debts
£1,500 on cc
£10,000 to DM
£10,600 car loan 1
£18,000 car loan 2 (not actually sure of this as I have my other loans on app but that paperwork is filed away. I'll double check it later).

The plan is : clear credit card by June/July

After that I'm not sure. I had decided to then work on car loan 1 using snowball method and rolling cc payment into that. Then money owed to DM as I feel bad about that.

I could work on the money owed to DM after cc but I think that way it would take longer and she doesn't need it/charges no interest.

Hi everyone

Another one here to join in if you don't mind

I currently owe £6800 on cc1 due to come off 0% in 6 months and £7600 on cc2 coming out of 0% at the end of this month. I need to decide wether to take a 0% for 6 months or 6.9% lifetime transfer on the £7600 debt by the end of the day. Pressure!

I do have another cc with a 0 balance so try and keep swapping for best rates. I'm determined to stop spending, I'm horrible with money and really need to get a grip of it but darent cut the cards up in case of an "emergency".

I'm really hoping to get a good chunk off them this year, I have £260 a month to pay them and a possible £1500 coming in the next few weeks that I can chuck at one as well, fingers crossed!!

Did post last year under a different name. In a year got 8000 down to 3800. Need to get rest gone by july

@geeraf there are plenty of cards that will offer a 0% for at least a year or 18 months - get one of those. you need to consider the balance transfer fees (usually 3%) to be effectively an up-front interest rate but these are still better value than the 7% lifetime deals so long as you ensure you get a lot more than 6 months.

Thanks @HigaDequasLuoff, I tried earlier and couldn't get a new card, so those options are what I have available to me. I guess I'll go with the 6 months interest free and hope I can transfer it back to the card it's currently on when that runs out...

Joining in. What do I do? Got £6k on a house loan (125% mortgage +10 yrs ago), owe my mum £5k, £1988 on a credit card. Oh and dh's car maybe £5k, 2yrs to pay off. Not quite sure what to focus on... Currently paying mum £100 a month. Dh's car is set at £200 a month I think. Mortgage loan costs £74 a month which is why it's been left alone on a horrible 10% interest. Got the option to put it on the mortgage this month as mortgage needs changing, which would use most of our equity. Dh's credit card has a 6.9% interest rate, he's literally just told me that so I'll be looking at a 0% one as he's messed that up twice somehow. Got £500 saved for 'just in case'. My car will die this year or next which would mean more debt. Looking forward to free childcare hours in Sept!!!! Which will give us £500 more a month. I'm not sure what to focus on... Credit card maybe, and get that one gone?

That American debt management bloke (name?!) says to focus on debts in order of size, start with the smallest... Is that the best plan?

@Indecisivelurcher it is much better to pay off the highest interest debts first. that £6000 at 10% is probably your first priority unless any of your credit card debt is on a high interest deal in which case that takes precidence.

a 10% interest charge on £6000 is £50 per month so the majority of that payment is just paying interest not reducing the debt at all.

make sure you are making the minimum payment to avoid fees on all the other debts and then pour every penny you can into the current priority debt until it is gone, then move on to the next highest interest rate.

look out for balance transfer opportunities if your credit card debt isn't on a 0% deal.

That's what I would have thought too. I am tempted to get that £6k on 10% added onto the mortgage. Using equity to consolidate some debts when we move our mortgage in Jan is an option. If it's on the mortgage then it can just tick away. It was part of buying our first house anyway, the way they did 125% mortgages back when they were a thing.

I'm really worried that either this year or next we will need to buy a new car, which will mean taking on more debt. We are on £18k now and could end up at £25k. Which is going the wrong way.

Checking in for the last day of the year. Unfortunately I had to use my credit card over Christmas so that's set me back slightly, but I'm ready to tackle my debt head on in the new year. Current debts stand at -

Electricity £928.16
Loan £1205
Credit card £833
Overdraft £700

Total £3666.

Just checked and that's £134 less than the beginning of the month. Would have been more if I hadn't spent £50 on my credit card, but oh well! Slowly getting better.

Hope everyone has a lovely new year! I'm staying in, having a quiet drink at home.

I was reading this thread earlier and it prompted me to go online and search for a 0% interest card to transfer my balance to. £5852 transferred this afternoon. DD set up for £150 per month.
Cancelled £140 of DDs on Sunday.
Set up transfer from my business account to personal account to cover my mobile phone bill that gets paid by me
£100 a week to live on - that's food shopping and other expenses
Signed up to the Top Cash Back app
Looking to move my broadband from Virgin to BT £51 v £25 per month !
It's liberating !! (But worrying how often today I've thought about spending money on "stuff" and then realised I can't. It's like withdrawal symptoms !!)

Rule number one on clearing debt :
Ignore the actual balance, focus on the interest rate
as that way every pound you pay down has the most impact on the interest you are paying

Rule number two on clearing debt :
Move all credit cards, even zero interest ones, to Standing Order rather than direct debit.
There is a spreadsheet that was written by a poster called TalkinPeace that explains why and the FSCS now agree with her method

Rule number three on paying down debt:
Do a budget and go through EVERY credit card bill and bank statement so that you know exactly where your money is going

Rule number four on paying down debt:
Want is not the same as need

busybee
Your debt balance is high but you know how and why you got there and have a plan to get out.

On the old debt threads there were posters who owed £40k and had no idea how they got into that mess

Well done @GinisLife that is a really strong start!