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

indecisive
10% is fairly high. What is the term of the loan ?
then again what is the rate and the term on the mortgage ?
work out the total value of interest to be paid with the various methods and work out which is lower

also bear in mind that lower predictable payments that you can definitely afford
allow you to clear down other bills and build up savings cushions
so not all bad

Thank you @listening. I have just been looking at things and can move the loan onto our new credit card to pay 0% interest. It would also mean we had just 1 car loan and the credit card with £8.5k which we could set up a regular payment for. I think it would make me feel better.

Oh and £5k I owe my mum 😱 Argh hate this. How did this happen...

All too easily
but now you are getting it under control
well done

Cheesenpickles welcome! Well done for telling your DH, now you both can work on getting it all paid off as a team!

Indecisive that's good news! Just figure out how much you need to pay on the balance to have it paid off before the 0% runs out and set up a standing order for that amount (if you can afford to do that and live within your means) so that you won't have to then hope for another 0% card when the time runs out. Of course if you have to do that to still be able to eat etc, then do so. But the sooner you can pay it off, the better. Imagine having the money you're paying on payments in your account, that's what I'm doing - it's a huge motivator.

We won't be able to pay it back before the 0% runs out, but hope we might possibly half it.

Can I join?
I’ve finally realised the mess we are in, seems I’ve been avoiding reality for a long time!

CC1 £3803 0% aug 2020 and 1 dec 2020
Think I can just about pay off £2149 leaving £1044 remaining in aug

CC2- £4870 0% deal ends March 2021 currently paying £49 min payment

Overdraft 1 £3400
Overdraft 2 £2000

My plan is to pay off CC1 as much as possible by august then focus attention on CC2. When both deals expire move the remaining amounts to one card and use the snowball effect to pay them off quickly.
Then I’m going to focus on OD1 and 2 which by then I should be more in a frugal mindset and reduce the overdraft and then finally save for the stuff we want and not put it on credit.

Really scared myself as husbands job is looking iffy and I work partime and term time only so bring little in, with no scope for overtime or other job as I can’t afford childcare.

I’ve deleted my amazon app as I think that was a huge money drain, and I’ve stopped coffee shop purchases, removed my bank cards saved on my phone too to stop easy spending.
I feel motivated but quite miserable at the thought of the long road ahead.

Hi there twinmama
What is the interest rate on the overdrafts ?
Because if it is killer now, you are better off paying a bit above minimum on the cards (by standing order rather than direct debit)
and whumping the overdrafts
and then do the snowball.
Highest interest rate first.

It is a long road but if you cut out the frivolous spending you'll improve your habits for a lifetime.

Can you free up some cash by decluttering - boot sale season starts at Easter so you have a few weeks to get ready.

Look back at the old debt threads for some really cheapor free ways to amuse kids for a day.
( feeding the ducks costs a lot less than a theme park )

@twinmama, I'm in a similar situation and headspace, sending some solidarity!

Thanks ListeningQuietly
The overdrafts are costing £55 a month each in interest/fees.
Overdraft 2 was meant to be paid off by summer but when I went back over our costs I realised my sums were out of date and several bills had increased which was very stupid of me. Should I still pay off od ahead of credit cards even though they will finish 0% and jump up to high interest?
I’ve sold everything I can at the moment but eyeing up other items which may generate a bit of cash.
I hear you re the children, I’m definitely not signing them up for expensive half term clubs and activities. however just their normal day to day clubs (brownies/cubs) etc are constantly sending out invites to amazing days out, sleepovers etc all cost £30+ each a pop! Feel horrendous having to say no as they don’t ever ask for anything anyway.
It feels relentless and actually, if you let it and agree to everything (which I’ve clearly done in the past) it leads to this nightmare I’ve got myself in!
I live in a very wealthy area and I have been living waaaay above my means, quite ashamed of myself.

Twinmamama
What rate will the cards go to when the 0% ends ?
just that the overdrafts are costing you 19% and 33% right now.
If you can chip away at the cards
eg pay £75 a month on each by standing order
and then throw everything at whichever overdraft has the higher rate
and then throw the £55 a month as well at the second overdraft
by July you'll be in a good place to really hit the cards
without incurring too much interest.

Re the area you live in - I bet you'd be amazed how many of the other Brownie mums are also nursing big piles of debt.

Start suggesting free things - like a "sticky card walk in the woods"
or a walk in a park that nobody knows (especially if you find an unusual entrance with free parking nearby)
or even just a colouring day at somebody's house with no screens and no entertainment
a bit of boredom is good for kids
it teaches self reliance and resilience

ListeningQuietly ok that makes sense.
The first cc will move over to 19.4% I the second one the same I think.
Re brownie mums I’m sure you’re right, they hide it well though

Twin
RE Brownie mums
I've been involved with debt counselling on this site and others for a while.
It is shocking how many people are secretly living way beyond their means,

Very true... I’m clearly one of them!
Thanks for the advice I’m going to tackle it slow and steady and one day I’ll be back to zero (Or even better with savings!) and it’ll be so worth it.

Indecisivelurcher good luck! X

200 paid off. Now 3700 left

Great work @Accidentalaccountant I've paid off £175 this morning which is the last of the payments before I can start overpaying next month.

£12,754.15 to go.

Although I'm incredibly embarrassed, I would like to join in this thread. I owe a total of £1,202.82 to various companies. 2 are CC's, 3 are bills which I have fallen back on. To some people it may not be a lot but to me it seems like a huge amount that I just cannot see going down.

I am always in my overdraft and have fees coming out constantly for that. Standing orders don't get paid as there are never enough funds in the bank. I am at my wits end. And I still can not control my shopping habit. I always, always cave in and 'treat myself' knowing damn well I don't have the money to do that.

At least £500 of this needs to be paid this month to avoid late fees and interest. I have calculated £480 to live on for the rest of the month (including food shopping), so I just have no idea what I am going to do. It seems like such a huge mountain to climb.

I genuinely have no idea where to start. I am constantly stressed about money and bills. And buying things makes me feel better temporarily (which I know it's beyond stupid). I just don't know what steps to take or what I am supposed to do to help myself and get out of debt.

Following. Need to clear my debts the next couple of months.

Minnies
You need to sort your head out and your wallet will follow.
What bit of spending money makes you feel better ?
Can you get that same buzz for free?
Choose and then delete the basket?
Exercise?
Hobbies?
AS once you stop frittering money, meeting the standing order dates will get easier.

@minnies I sat down with a pen and paper and wrote out every expense from the last 3/4 months and grouped them by bills, groceries, personal spends, bills etc and then totted it all up. It was rather shocking - even taking out the fact it had been Christmas. I've started using an app called Emma evict shows every single purchase and allows me to group them. Means every penny is accounted for.

I'm now looking at the following principles when I got to buy something.

Do I need it?
Do I want it?
Can it wait?

So say I see a pair of trainers and I'm having a crap day. I def don't need it as I have three pairs yet to wear. Do I want them? Well, yes... but why? I'm having a shit day. Should I just watch some trash tv or read a book instead to cheer myself up. Can I wait? If I really absolutely must need them, I'll wait till I've paid off blah blah blah and save up for them. If I'm meant to have them I'll be able to get them and it'll feel a lot more rewarding. If they aren't around any longer then can I get them cheaper on eBay etc?

It's tough going but

Not sure if everyone knows this already but according to Martin Lewis interest rates on all overdrafts are moving to 40% by April time so anyone with overdrafts would be better paying them off first

@SNG2019 that's insane. Thankfully that's the one debt I don't have!

Side note. As I was able to borrow some money to consolidate a number of varying debts into one figure, I'm suddenly getting all sorts of new offers for loans and cards from the same providers I just paid off. I know it's a money making business but gawd that is scary.

Not sure if everyone knows this already but according to Martin Lewis interest rates on all overdrafts are moving to 40% by April time so anyone with overdrafts would be better paying them off first
Yes and No.
Banks are banned from charging daily penalties any more
and are capped at penalty interest of 40%

so if you have had an unauthorised overdraft you will save money

and authorised overdrafts will become a competitive market