To pay off all of my debt in one year - can I do this?

[spinwizard]

Hi,

I am sick of half hearted attempts at paying off my debt. I have decided that it's time to do something drastic and sort it out once and for all. I owe 24K, not including my mortgage :(

Thankfully its on 0% or low interest. I have worked out a budget that I would need to stick to in order to achieve total unsecured debt freedom in 12 payments time.

I am single mother and headteacher. The debt hang over me but I don't take it seriously enough. I have prepped the kids that this has to change and that we are going to have a year of super frugality.

My monthly net income is £3918 and all of my essential bills, including car fuel come to £1200. We spend about £400 a month on food so a total spend of £1600. If I pay £2100 per month off the debts, I will be clear in 12 payments HOWEVER this means that I will be left with just £200 wriggle room.

Am I being over ambitious?

Does that allow for:
Petrol/diesel
Car tax
Insurance renewal increases
School trips for the kid/s
Pocket money
Car repairs / MOT / service
Replacing clothing / new shoes for kids
Toiletries, loo roll, cleaning products etc
Emergencies ie new washing machine) happened to us this week!
Haircuts for all
Occasional treat of an ice cream, Cinema, a dvd or game - even if from a charity shop or second hand
Birthdays and Christmas?

Have a good look through YNAB - it'll give you some great advice on that front!

It's not all or nothing, spread it over two years and have £400 wriggle room, your far more likely to succeed if you aren't miserable. Also download the free debt repayment app (icon has a light blue background and a dove on it). You can input all of your repayments on there and it shows you graphically and also calculated the predicted payback date which is great for keeping you accountable

You have to set achievable realistic nd managwleablengoals to succeed. Leaving yourself such little wriggle room sounds like it may leave you blowingit and then feeling bad..much better to do 1k and for rhings to leave you feeling good, great and positive than stretch too far and feel tense, doubtful, and with no room to enjoy life. That's a good income and if you can have a more relaxed time scale and pay it back without stressing everyone out, I'd do that. You have a stressful job as head .. donr make your life miserable when it could be done much easier.

Almost all of those things although pocket money won't be happening as they already have about £100 each in their piggy banks. This will have to last!
I included £50 for christmas and birthdays. We will have a vvery frugal christmas just for one year. It won't kill us

Ps. You can still add to a savings pot.. you donr have to spend it all.. you can juts also have the feeling that you are learning to save too .. rather rhan it always having to be boom or bust type of approach.

How about pay £1900 off and put £200 aside as a cushion. £200 isn't much to play with as 'fun' money.
If you you find you don't need it each month, transfer it to debt.
Might take you 6 months or slightly longer over your 12 month time limit but you're not limiting yourself too much if you need a bit extra one month.

I would spread it over 18 months and give yourself a little more wiggle room but good for you on tackling it

I disagree with some pp and think you should go for it. It sounds like you would be more motivated to get the millstone of your neck full stop by going at it hard for the short term. You say it has already dragged on for some time so I would capitalise on the motivation that the near-term goal seems to be giving you.

My one query would be stopping pocket money and the frugal Christmas. No actual issue with that - lots of families have no choice - but if it means your kids will be down about things I would hold those back in and take (presumably) just a month longer to pay off the debt. Otherwise it could make things disproportionately harder for the sake of a small tweak.

The key thing is to make sure your payment plan is flexible. Make the payments manual vs. fixed or automated. That way you can always adjust if something unexpected happens.

It's tight but doable. I would look at following the Ramsey method, where you have an emergency fund, then pay off debts smallest to largest. I would not do it without an emergency fund, as there is bound to be something that comes up which you have not expected. An unexpected car repair, something in the home breaking which is essential.

Also if the interest amount is fixed on the loan and not accumulating as you go I'd be squirreling that payment into a high(er than the loan) interest savings account and transferring a lump sum across to best make use of the savings interest.

It sounds miserable and punitive, for you and your kids - just a lousy £200 for fun? I agree with @Changingplace to extend the paln to 18 months.

It looks very tight and quite miserable to me but it’s possible. I would definitely be looking to have it paid off in 18 months - 2 years personally, but I’m not you and i think any amount of debt would really drag me down mentally and I’d also probably seek to pay it off quickly.
Life can feel bleak without things to look forward to but if you know it’s for a short and definitive amount of time it’s more manageable.
well done for taking control of this 💐

I'm in the process of doing the same. I spread mine over 18 months and have 9 months to go. I'll finish in November and well be able to have an indulgent Christmas before I start saving in January.

It's total been worth the frugal times for the excitement of being debt-free in just a few months time.

Good luck! You can do it!

It's a good aim and you can just try and do your best.

But it doesn't have to be all or nothing. If you get to the end of the year and you still have, say £5k left, you haven't failed, it's still a remarkable achievement and you'll only be 2/3 months away from being debt free.

Just make sure you pay the minimum on the cards on time and if any of the 0% offers run out, you can just get another one.

Something that might help that I don't know if you have thought about. I'd guess you'll start to get CB again after not previously entitled so have you factored this into your budget?

If you haven't already, I'd recommend moneysavingexpert.com.

Start with the get out of debt advice with loads of tips about making extra bits of money and buying/doing things cheaper so your money goes further.

How old are your children? Stopping their pocket money and massively reducing their Christmas/birthday presents feels a bit like ‘punishing’ your kids for debt that I assume wasn’t their fault? I don’t know. I agree that cutting down on Christmas etc is sensible and no children need piles and piles of presents, but within reason.
Id probably try and do it over 2 years and give yourself a bit more leeway. Do the children have hobbies etc that need paying for?

Do it!

Have a frugal year and summer hols 2025 have a lovely holiday as a reward.

Yes, I agree with this. It does seem as though the children are being punished for your debt and because you hadn't got a handle on it previously.

I'd extend to 18 months.

I would take short term pain for long term gain. Aim to clear within a year but give yourself a break if it takes a month or two longer. I think it's a really good example you are setting your children about financial responsibility. If they remember that 1 year they had to tighten their belts, then it will help prepare them for the real world.

Hi spinwizard, did you manage to pay it all off in 12 months? Just curious.. hope you did

Try it, even if you manage a few months then ease off for a couple then go again you will hasn’t made a massive impact in it.