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

That was the intention to make it a more competitive market but the fact is almost all of the banks have just raised their interest rates to 40%. People should just check with their bank. There's a few articles on money saving expert if people need more info.

Authorised overdrafts will be unaffected
www.theguardian.com/business/2019/dec/04/hsbc-overdraft-rate-customers-fca-fees

That article doesn't say authorised overdrafts are unaffected?

No, but the clampdown on fees relates to unauthorised.

Overdrafts are best avoided but there will be plenty of shopping around to be done to game the banks back at this.

I’m pretty sure the interest rates apply to authorised overdrafts too.
www.google.co.uk/amp/s/www.moneysavingexpert.com/news/2020/01/tsb-to-follow-other-banks-and-raise-overdraft-rate-to-39-9-/amp/

horses mouth
www.fca.org.uk/news/press-releases/new-overdraft-rules-mean
data
www.fca.org.uk/data/changes-overdraft-charges

Checking in again for end of Jan update moving into February.

Had to buy a new phone and ended up spending more than I should have but it's used 8 hours a day so does everything including all budgets!
Plan to repay 0% card by may for this and I have saved £400 by buying this way rather than contract.

Debt start of Jan 2019
Credit cards (various): £4650
Furniture 0%: £1575.86
Savings: £0

Jan 2020
Credit card (0%): £2320 (£1380 Christmas, £940 misc blush)
Furniture 0%: £1036.75
Savings: £4720

Feb 2020 (start)
Credit card 0%: £3792 (£1385 Xmas, £1192 crap, £1215 phone)
Furniture 0% £995.28
Savings £4100

Not the best month but plan to pay around £1k off during Feb which should help

Heading in the right direction
and reasons identified
onwards and upwards

Not doing very well here. Still struggling with the logistics of what to do with things. Got an old loan for £6600 on 10% interest. Mortgage company won't let us add it to that because they'll only do £10k minimum. The loan company won't let us pay it off with credit so 0% credit card is out. Could look at getting a new loan, getting the cash put in the bank, then doing a debit payment. I don't really want a loan, in part because if my car dies this year then I'll need a loan for a new one. Pretty fed up with it.

We've also booked a week away in August so that's another £500 🤦🏻‍♀️ That one goes in the marriage is a compromise box. Deposit for that came out of our recently established savings.

Totals now:
£6600k on loan on 10%
£2k credit card 0%
£5250 owed to my mum
£2k car finance 18m left

£300 in savings

Currently paying each month: £200 to car (fixed), £150 to credit card, £100 to my mum, £78 to loan (£50 of which will be the interest).

Honestly thinking do I just leave things ticking over until September, when we'll get free hrs childcare then go for it?! We'll be £500 better off a month.

Hi there Indecisive

Surreal thought .... What if you added £10k to the mortgage
cleared the loan, cleared the card, cleared half of what you owe your mum
then make sure that you overpay the mortgage by 2/3 of what you were paying monthly on the loan
and pay your mum off each month
and let the car loan tick along

Car finance - the main thing is to buy a 4 year old car that meets your needs, steer clear of PCP

Holiday - yup, that is about staying sane.

Come September, throw half of the money saved at remaining debt and half into savings and then by the end of the year you'll be in a pretty good place.

They wouldn't let us put the money to mum on the mortgage, or needs to be something that's down in paper. We did consider doing some work to the house to get us to £10k but it seems like craziness?! If we do need a car we could do car and loan on mortgage... Could be this year could be next. Appreciate you having a think, very interested what others would do!

Get your Mum to do a formal loan agreement
www.lawdepot.co.uk/contracts/loan-agreement
get her to pick an interest rate (Base plus 1% is a nice one)
get her to clarify that the loan was for essential works after you bought the house (NOT towards deposit ;-) )

stick it under their noses

Car - I would suggest Zopa as it works out cheaper .... borrow for 5 years, repay early

That's interesting, will have a read, thanks!

I removed the Amazon app at the beginning of January, and I’m amazed at how much I’ve saved going by previous months I’d spend an average of £150 a month! No idea on what, some bday presents but mostly ‘useful’ things I thought I couldn’t live without!
A real eye opener... I’m going to keep it off my phone for the whole of 2020 to curb impulse spending.

I've removed Klarna, Asos etc which I'd browse when bored. Amazon is on there but hidden away and a shared account so can't order anything without it being flagged by dh.

One click shopping destroys finances and the planet
well done for stopping.

Checking in as an end of January motivation boost.

Didn't fully stick to January budget due to some one-off essentials but I'm proud of us for writing down every little thing as now it's more obvious where all our money's going and we will try to be more careful next month!

Today I changed the CC payments in line with snowball method. So now:
CC1 - 1107, paying £200/month to clear by end summer
CC2 - 10,805, paying £250/month, will increase this soon. Want to get it cleared by August 2021.
Furniture 0% last payment March.

Getting there!

Checking in for the end of the month.
Current debts are
£842 credit cards
£890 electric
£700 overdraft
£1140 loan

£3572 in total. Nearly £100 less than last month so that's something. Slowly but surely is my aim.

OneTwoTree
Writing down all spending is a massive mindset change
and you clearly have a good handle on the balances now.
Well done.

Daeneris
What is your priority order for them - bear in mind that the overdraft interest rate is about to go up probably so that becomes the top priority and the loan at fixed repayments stays bottom
but you'll do it

Feeling quiet proud. Debts about £3000 at the moment but managed to scrape together and pay a £300 waterbill today so thats something. Dp says we cant ttc until we are financially stable/better off.

ListeningQuietly my overdraft was at the bottom of the list. I can't change the amount I'm paying off the loan as it's a fixed term agreement, same with my electricity debt. The credit card I'm paying off a bit more than the minimum amount.

I just can't afford to pay back the overdraft at the moment while I'm paying off all the others, I'm a single parent on a low income. I did worry a bit about the interest but I'm with Barclays and they aren't increasing to 40% like the other banks, after checking it out it will only be about an extra £3 a month which I'm ok with for now.

I’m very worried about the overdraft increase, I have one at £3400 and the other at £2000 I think I can get the £3400 one down by £1800 by July.
I’m applying for other jobs so if that happens I can pay off more but I can’t guarantee it.
I’ve moved to a Monzo card so I can try and pay back my od like a credit card.
Sadly I can’t get a money transfer (I’m assuming) as I already have two cc at £3800 and £4400.
What a mess

Daeneris
Well done on checking already - and the fact that you have will make the bank more chilled

Twinmama
THe main thing is to talk to them and try a bit of haggling to see if they will give you a lower rate

overlending is a real hot potato so they might be amenable

I’d like to join please - working in dollars but current debt as follows:
Golf club membership 13,106
Credit card. 7,600
Line of credit. 25,000 (home Reno overspend)
Student loan 23,000 (youngest DD)

Yikes!
New budget done and being stuck to - aiming to clear cc by end of April and golf club by end of July. Need to stay off amazon after a glass of wine!

Hi there seenoevil
What are the interest rates on them as that is the key factor in clearing debt