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

Me too x

Yep, it's not the same without TiP

A firm but supportive grasp of the shoulder to all those battling debt and wondering if there is light at the end of the tunnel.

LQ thank you

My update: I've paid off 40% of credit card and all other payments re car are rolling on smoothly. Until I start work again I won't be making major (or indeed any) dents but I'm definitely calmly on track and not buying anything else on the cc .
Though really the cc Bill consists of previous holidays. So no holiday this year and we won't add to the debt that's there

Hey chums, latest position with me.

Almost half way through our holidays here (Scotland), have had a couple of interviews which I’m awaiting results of with another on Wednesday. Living off redundancy money and DH wages meantime.

Step 0 (4 walls) - all current, no overdraft - complete
Step 1 (£1k Emergency Fund) - complete
Step 2 (Debt Snowball) - in progress
- CC1 £9,118 - complete
- Car Loan £12.4k - complete

• DH tax bill £3.2k - DH got round to calculating this and we have enough saved in his tax account to pay in full and part pay his expected bill for next tax year to let us get ahead - complete
• CC2 £11.9k- fixed SO - I have enough set aside to repay this in full but will continue with fixed SO (it’s currently 0%) until I’m back in gainful employment Step 3 (3-6 month emergency fund) - in progress, balance of my redundancy money account is currently £22k. If I get back into work soon I’ll pay CC2 and have approx £10k in emergency fund with a target of about £25k in total Step 4 (invest/pension) - not started although I have a good pension accrued with current employer which is final salary and was non contributory Step 5 (DS education fund) - not started Step 6 (Mortgage) - currently £60.9k (sub ac 1) not started, have had a staff rate since taking out which will be valid for 12 months (May 2020) then it moves to normal punter rate. Home Improvement Loan £23.2k (sub ac 2) - fixed SO Step 7 (give) - not started

I should have explained, I follow Dave Ramsey hence the steps. While I'm back, what are your thoughts on the step re savings for child education? DR is American so some of the steps are slightly different for the UK.

I have one DS who is 2 years from going to high school. Being in Scotland, our further education system is different so we (he) does not need to pay for education itself but may have accomodation/living costs for example. Ideally I'd like him to be in a position to self fund these things via a part time job if only to teach him the ways of the financial world. We will of course help out if needed.

So, I guess my question is...how much , if any, would you set aside to support your DCs further education?

Mum4
When children move away to University your household bills plummet.
If you give them what you had been spending on them (around £75-100 a week in total) they will be fine.

Am also in a Scotland
Depends if they go away for Uni or stay at home
DS is awAy and costs us about 1k a month

Thanks both...if I'm totally honest I don't think DS is remotely academic so further education might be a moot point, but want to be prepared to support him if needed.

At the start of this thread (1.5.19) I posted
‘Overdraft is £1000.
I owe hmrc £2000 for overpayments. I pay £30 a month’.

Update:
Overdraft: I was in it by £1000 when I posted but think this is the first month in a year that I’m out of my overdraft!
Hmrc: £1151 left to pay off.

I’ve worked a stupid amount of overtime and sold lots on eBay.

Can I join please. Really trying to become debt free. Here goes

CC1 £792
CC2 £125
Next card £192
Gas debt £81
Electricity debt £85
Overdraft £350

CC's already switched to lower interest ones and repaying CC1 at £70pcm. CC2 min payments plus a bit on top. Utility debts paying off at £20 every fortnight.

PCP car loan about £10,000. Was in desperate need of a car earlier in the year. Needed a reliable, safe car after numerous issues with my old one. Ended up getting legged up in a PCP plan for 4 years with a balloon payment at the end. Current PCP payments are £211 pcm.

I've cut costs where I can. Switched suppliers for gas and electricity and the debt is with previous supplier British Gas (complete rip off). Have sim only mobile phone contract.

Started saving with the gov help to save scheme where there's a bonus payment every 2 years. Currently £325 in there. Got another instant access saver with £200. Using one of these online app for small deposits and have roughly £60 in there and sold and made about £50 on eBay recently.

I'm really trying to build a buffer as I bought my house in 2017 which completely took all my savings. Being a lone parent meant there's no second income so ended up in debt.

I've previously been quite savvy. Had loans with credit unions to by cars etc, but the local one has closed down so have turned to credit cards and car loan 😕

Any suggestions would be appreciated.

As with all things debt, the interest rate is king rather than the amount borrowed.
Eg if the instant access could clear the Next, how much interest would you save every month to replenish the saver.
Ebay money, do not allow yourself to spend it, throw it at debt
as a year of total focus will reduce the interest payment a LOT

Is there any way you could switch to a cheaper car ?
A £5000 car over 5 years with a Zopa loan would cost you 1/3 of what you are paying
))))) PCP ((((((

Thanks for the tips. The PCP was a big mistake. I've had a settlement figure and the dealership I bought it from wants to buy it at the value then let me up in a newer model at £4 cheaper a month. Meanwhile I'll have to put in another deposit.

Tried another dealership to part ex and they said it's currently in negative equity so I'd lose and have to pay finance company to get out of it.

The car has been the Bain of my life for the last 8 months.

Do PCP not have to prove affordability criteria ?
which frankly you would fail ....

Listening quietly yes I think they do. You're right it appears I can't afford it. I don't know what to do though 😕

Buttonmoon
Simple.
Ask them to prove that you complied with the affordability
if not, hand the car back on a "no recourse" basis
ie they get the car and the debt they sold it with

you then go buy a sensible car for £3000 or so

Thank you listening. Is there some legislation I can quote. I foresee them trying to get out of it but I'm going to have a go

I've been awake most of the night thinking about debt. I really need to get a grip of this. Someone help please.

Mum4Fergus - given that the current SAAS interest rate is 1.75% , it doesn't make sense for students not to avail themselves of it . Even if they don't need it for living expenses, they should apply for it and stick it in a high interest account.

The amount of loan available is between £4,750 and £5,750 depending on the parents household income (there is also a non-repayable bursary of between £500 and £2,000, for household incomes up to £33,999 ). You can then decide how much you want/need to top up your ds' living expenses.

Graduates do however start paying back at a lower threshold than in England.

Ok had to do something so I've researched and sent a letter to the finance company as they have no details of my affordability. I rang them and they spoke to the underwriter who states they don't do this as part of the application but the dealership may have. I've used the non recourse bit and hope they'll allow me to return it without penalty.

It also looks like PCP could be treated like PPI in terms of mis selling. The salesperson I dealt with certainly mid sold it to me.

I'm praying there is a positive outcome to this.

Well done on taking the initiative buttonmoon
positive action breeds positive energy

Thanks listening for the heads up on non recourse. At least I learnt something today. I'll let you know once I get a response.

So today I paid off next account in full. Had a confirmation call from the finance company to say they've received my letter. Will be allocated to a complaints handler who will be in contact in due course.

I'm feeling a little more positive today. Just writing on here is encouraging in itself.

Thank you.