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I want to be debt free......
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lisaburton
Posts: 101 Forumite
Well basically I have been lurking in the forum for months now. I know that I am in debt but I still want all the good things.
After a major splurge this weekend which has put me heavily overdrawn. (well will be in about 3-4 days when all the payments have gone to my bank account)I have decided that I cannot carry on any longer like this and need to get rid of all my unsecured debt.
I want to do it by paying it off this time instead of consolidating it (we consolidated it 2 years ago but I am now back in the same postition)
I am currently having my managed loan with hsbc restructured so I will not fall behind with payments and will hopefully allow me to make overpayments. The only downfall is that if no overpayments are made I wont have it paif off for 12 years.
I have already been to the CAB 3 years ago to attempt to sort out my debts and started paying silly amounts of £5 month on cards etc to keep up with them as I had baliffs etc knoking at the door.
I havent allowed it to get as bad as that this time and I just want to get rid of it all in as short time as possible.
My husband pays the mortgage on our house,electric,gas,water and council tax.
Below is what I owe and how much comes out of my salary each month.
Debts:
HSBC Managed loan: £7,500
vanquis credit card: £750
aqua credit card: £300
capital one credit card: £200
mothercare store card: £500
Father in law: £600 (money he lent me to get a car last year)
Talk Talk: I currently owe them £204 they are asking for £90 1st Jan then £100 a month there after.
monthly earnings: £1,100 +(optional overtime average £400)
child benefit: £105
Total: £1,205 pm + extra overtime on occasions although not guarnateed.
Out goings:
£110 secured loan (currently tied in for another 2 years)
£94 managed loan HSBC
£45 Vanquis aprox minimum payment
£35 Aqua card aprox minimum payment
£30 capital one aprox minimum payment
£25 mothercare store card aprox minimum payment
£200 Food shopping
£30 car insurance (cheapest I can get as I have had a lot of claims)
£40 petrol
£25 phone bill
£30 mobile phone bill
£350 childcare
Total:£1014
Leaves £191 for clothes,and other extras
£591 if I get overtime.
My next pay is on the last day of december so my aim for 2007 is to cut a chunk of debt and also give up smoking.
I am due a pay rise in Febuary so will be earning an extra £100 after tax a month and also due to a potential change in pay structures in april I may also be looking at an even larger pay rise then.
What I am looking for is some guidance and advice of where to start?? I feal more spurred on due to my up and coming payrise and I don not want to see this money wasted. If that makes sense.
If anyone could give me some advice on where to start or what order to pay things off it would be much appreciated.
Also I want to pay these off without mucking my credit score up too much as I am very very slowly moving up (im on 12 now alot better since last year)
Sorry to babble on so much I just dont know what to do.
Is putting my food shopping money on my credit card each month then using the credit card a good idea or not? as I thought this may improve my score to whilst also helping to pay some debt off because anything not used on food can stay on the card.
Any advice or help would be much appreciated.
Thanks
Lisa
After a major splurge this weekend which has put me heavily overdrawn. (well will be in about 3-4 days when all the payments have gone to my bank account)I have decided that I cannot carry on any longer like this and need to get rid of all my unsecured debt.
I want to do it by paying it off this time instead of consolidating it (we consolidated it 2 years ago but I am now back in the same postition)
I am currently having my managed loan with hsbc restructured so I will not fall behind with payments and will hopefully allow me to make overpayments. The only downfall is that if no overpayments are made I wont have it paif off for 12 years.
I have already been to the CAB 3 years ago to attempt to sort out my debts and started paying silly amounts of £5 month on cards etc to keep up with them as I had baliffs etc knoking at the door.
I havent allowed it to get as bad as that this time and I just want to get rid of it all in as short time as possible.
My husband pays the mortgage on our house,electric,gas,water and council tax.
Below is what I owe and how much comes out of my salary each month.
Debts:
HSBC Managed loan: £7,500
vanquis credit card: £750
aqua credit card: £300
capital one credit card: £200
mothercare store card: £500
Father in law: £600 (money he lent me to get a car last year)
Talk Talk: I currently owe them £204 they are asking for £90 1st Jan then £100 a month there after.
monthly earnings: £1,100 +(optional overtime average £400)
child benefit: £105
Total: £1,205 pm + extra overtime on occasions although not guarnateed.
Out goings:
£110 secured loan (currently tied in for another 2 years)
£94 managed loan HSBC
£45 Vanquis aprox minimum payment
£35 Aqua card aprox minimum payment
£30 capital one aprox minimum payment
£25 mothercare store card aprox minimum payment
£200 Food shopping
£30 car insurance (cheapest I can get as I have had a lot of claims)
£40 petrol
£25 phone bill
£30 mobile phone bill
£350 childcare
Total:£1014
Leaves £191 for clothes,and other extras
£591 if I get overtime.
My next pay is on the last day of december so my aim for 2007 is to cut a chunk of debt and also give up smoking.
I am due a pay rise in Febuary so will be earning an extra £100 after tax a month and also due to a potential change in pay structures in april I may also be looking at an even larger pay rise then.
What I am looking for is some guidance and advice of where to start?? I feal more spurred on due to my up and coming payrise and I don not want to see this money wasted. If that makes sense.
If anyone could give me some advice on where to start or what order to pay things off it would be much appreciated.
Also I want to pay these off without mucking my credit score up too much as I am very very slowly moving up (im on 12 now alot better since last year)
Sorry to babble on so much I just dont know what to do.
Is putting my food shopping money on my credit card each month then using the credit card a good idea or not? as I thought this may improve my score to whilst also helping to pay some debt off because anything not used on food can stay on the card.
Any advice or help would be much appreciated.
Thanks
Lisa
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Comments
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Hi Lisa.
Firstly if your credit card has an existing balance on it then I wouldn't put the shopping on it. You will just be paying interest on it and the temptation to only pay the minimum payment might be too strong. It also won't make any difference to your credit rating. By making full payments and on time this will help. The amounts are pretty much insignificant generally speaking.
How much are you paying back to your FIL?
As you have recognised the first thing to do is address your spending habits. For this I'd recommend a spending diary. Update it daily and it really becomes a key tool in becoming debt free.
Cut up the Mothercare card and the CC's if you feel you will spend on them.
What are the APR's on your cards? Sadly I'm not sure whether you will be accepted for something like a low life of balance transfer card due to oyur rating! :think:
It's a difficult time to be starting a debt free journey what with Xmas coming up but there is no reason why you can't start putting things into practice ready for a 'debt free wannabe' New Year! :beer:0 -
Im planning on starting on the 1st Jan as I only have £80 left at the moment so cant do a lot with that and it has to last me another 2 1/2 weeks I forgot to add that I pay my FIL £100 a month but will be all paid off in june!! (first debt gone)
What debt do you suggest I tackle first because I feel as I have a few smallish debts It would be easier for me to stick too if I can see an end to the tunnel. (if that makes any sense)0 -
Have a look at this little baby (no ladies it isn't a rude pic of me :rolleyes: )
Basically it involves paying off the debts with the highest APR first. In the long run it will save you money on the amount of interest you will pay. 0 -
had a look at it but cant work out how to add more than one debt on it do you know?0
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lisaburton wrote:had a look at it but cant work out how to add more than one debt on it do you know?
Above 'debt number 1' there is a little drop down menu. 0 -
cant find it (im not very technical)0
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Thank you so much0
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a bit confused
your income is 1100 plus overtime of 400 on average ...do you mean that in a year you therefore get about 12x1500 ?
it would help you greatly if you itemised ALL your spending and not just '191 for clothes and extras'... try itemising each and every extra...do they include car tax, servicing, repairs, presents , xmas, kids costs/activities , holidays, takeawys, coffees/ work lunches or whatever... try to work out absolutely everything so you can really see where your money goes.
as already said, pay back the minimum on all debts except the one with the highest APR..on that pay the maximum you can until you have cleared it off and then go onto the next highest.0
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