stoping the card way of life

must_stop_digging · 5 February 2005 at 4:30AM

Inspired by the epic from the Rochdale guy here is my story:

Egg £ 993 owed @ 14.9%
Marbles £ 4510 @ 14.9% 0% till june
Halifax £ 5218 @ 6.9%
Sainsburys £ 3905 @ 5.9%
Natwest £ 2600 @ 5.8%

Total credit card debt : £17266

Secured loan £ 9000 @ 5.9%

This is a story of how to ignore all the warning signs
Starting when first married on very low income borrowed money on credit cards and bank loans and whenever financial position improved so did my borrowing.
Up to last year was spending more than repaying , six years ago had consolidated all credit card debt once into personnel loan and kept tsb card just for “emergencies”. However my problem is the latest dvd recorder or computer hard drive always turns into an emergency .

the egg card is the bt of a a&l car loan that was due to finish in December
At the end of last year moved £15000 from tsb to the others. Thought I was doing ok but debt not really going down as had no real strategy apart from looking for the lowest interest rate.
The wake up call finally came when I got knocked back for Texaco 3.9% an through link on the say no to 0870 site arrived here. The advise and encouragement have inspired me to stop and realise that this can only be sorted by biting the bullet . and not spending on luxury items.

I know that martin and most others suggest using all surplus cash to repay debt but as you can see I really need to brake out of the card way of life , “give me a card and I will just keep on digging “hence the alias. So have opened a A&L online saver to cover real emergency’s .

Got money 2004 on pc and to be honest got carried away on debt repayment guide ,worked out that could repay c/c debt by mid to late 2007 however i was adding in a lot of overtime payments that are fairly regular but not guaranteed .

Have now worked out budget of minimum payments £390 plus £100 month and £80 to online saver
Any extra at month end to make snowball repayments.

Money suggests extra payments to egg first then Halifax
Also found excel repayment calculator at: http://www.geocities.com/schizeckinosy/Snowball.html
This suggested egg then marbles

So far have followed the excel guide Repayments as follows:

Egg £650 (£20 min ) overtime allso no water or council tax this month (10 month D/D so used surplus)
Marbles £90 min
Halifax £108 min
Sainsburys £120 min
Natwest £60 min

The last thing have done is my wife now transfers £440 a month for food to joint account and have started using amex blue at asda and repaying full balance each month this has also left account surplus don’t know whether to use this to repay egg?

Any comments gratefully appreciated

soon2bjobless · 5 February 2005 at 12:59PM

Just a note of encourgement here - I made the mistake of buidling up debt - consolidating - and building up even more! Eventually we got to the position of having nearly £25,000 in non-mortgage debt - our minimum payments were more than out incoming wages! (one salary)

It took me years to even face how much debt I had never mind figure out what % I was paying..........

But at long last (and with the help from https://www.fractured.net - which used to be called Frugal Moms) I knuckled down - we got rid of our caravan, fancy car etc I car-booted and sold stuff through the free paper. I cut everything to the bone - totally gave up buying anything (and I mean even down to no longer getting a daily newspaper) and I got a job so at least we could live and make the minimum payments.

I used the Snowball calculator you mentioned and realised I was trying to pay off the wrong debt first . For anyone who hasnt seen it thhe idea of the Snowball is to pay minimum payments on all your debts but as one is paid off you dont reduce the payments - you just put the Ist payment towards the next debt (hence the snowballing term) So say you had 4 debts at £50 each - total repayement each month £200 Once the first debt was paid off you used that £50 to pay the next highest interest one - eventually on the last one you will be paying £200 per month to get rid of it.

By using the Snowball calculator you can see how long it would take you to pay off the debt and how much interest you would pay. By juggling them round you can save quite a bit.

It took me around 4 years of hard slogging but at last in Dec 2003 I became debt free and have been debt free ever since.

It was very hard - even now I dont spend a lot -weighing up the difference between needs and wants for every purchase.

I am also no longer frightened of debt which I was at first - I bought my new computer on buy-now-pay-12-months-later, put the money away in my ING account and paid it on time and made nearly £30 interest. I do my Tesco shopping on-line and use my Tesco credit card to earn double points - I have set up a direct debit to always pay the card off in full every month.

Now I am being made redundant I know I can handle being on Jobseekers etc as I dont have that many outgoings.

Anyway, what I am trying to say after a lot of waffle

is that no matter how deep you go there is always light at the end of the tunnel if you are prepared to work hard at it.

In answer to your query I would use the excess as part of debt repayment plan.

Good luck.............

Spendless · 5 February 2005 at 3:02PM

Hi

The £440 a month for food. How many is this for? There is a February grocery challenge on the oldstyle site and lots of ideas about making grocery shopping go further on there and on marriage/relationshiop board.

must_stop_digging · 6 February 2005 at 12:28AM

thanks for the support it is very easy to sit and think you are the only person in this situation the hardest part is taking to other people embarrassment etc. the most heartening part is that i know from other peoples experiences that it is possible , there is light at the end of the (very long)tunnel

as for the shopping its for four however my two sons 18 and 23 count double LOL

soon2bjobless · 6 February 2005 at 9:24AM

I know what you mean about embarrassement - I couldnt talk about my debts for a long time.........

I agree that you may be able to cut down on your food bill - this was the biggest saving I made - I went from easy over £100 every week (2 adults and a child) to at my most frugal - £40 a week - that £60 saving was chucked at my debt repayment to get rid of it quicker.

And having 2 older kids who have now moved out - I know just how much the buggars eat!!!

I will post tip about how I cut my food bill on the Money saving old style to see if that could help.

tiff · 6 February 2005 at 9:40AM

I agree you can cut your food bill. I am managing on around £45 a week so far, hoping to cut it a little further, give it a try

stoping the card way of life

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