£16,000 debt, turning regret into positive action.

LadyP01
LadyP01 Posts: 222
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edited 8 January 2020 at 5:55AM in Debt free diaries
So here i finally am, writting my debt free journey out for you all to read.
I had my LBM back in febuary when i finally relised that my attempts to be debt free were failing me. I had just purchased alot of holidays and spent alot of money redecorating, i soon relised i was undoing all my hard work.

When i relised something needed to be done this was my financial situation:
Loan - £10,000 - only had £800 paid off
Credit card 1. -£2,900
Credit card 2 - £2,600
Overdraft - £40

I decided to get a loan total out of £16,000 this was obviously a little more then i needed but i put i decided to borrow more to start an emergency fund from day 1 so that i avoided having to borrow on credit again.
I cut off my overdraft so that is gone, so now i just have a £16,000 loan to pay.

Iv decided to use a savings account to hold all my savings till september with the hopes of having £10,000 to make a dent in that loan on a repayment. Then i can pay off the final £6000 on a 0% credit card and continue paying it off interest free.
My progress so far in my savings account is: £5,645.60

I have a long way to go!!!! But i feel i have been doing some massive savings already to knock away my debt. I really want to be debt free in 2018 and im desperate to make this happen.

Thank you for reading, hope i didnt go on to much... Need to keep this motivation going :D

Quick update:
Its now June and i have officially brought my debt total down to £9428

Keeping motivated :)

Around page 12 and late 2018 I reached debt free which was an amazing feeling and a really hard journey.
Since then I got married and joined financed with my husband. I also got a new car. My journey now from page 15 is saving up to pay off my car early, saving for a mortgage and paying off joint wedding debt.

3 years later I am much more frugal, zero waste and have the money saving ethos in my bones.
I hope you enjoy reading some of my journey it's been very hard and now it's like we're doing it all again.
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Comments

  • UncannyScot
    UncannyScot Posts: 2,070
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    Hello, welcome :D
    BUGGRITMILLENIUMHANDANDSHRIMP I TOLD EM! - Foul Ole Ron
    It is important that we know where we come from, because if you do not know where you come from, then you do not know where you are, and if you don't know where you are, then you don't know where you are going. If you don't know where you're going, you're probably going wrong.
    R.I.P. T.P.
  • Bobarella
    Bobarella Posts: 10,824
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    Well done for all your hard work so far.
    " Your vibe attracts your tribe":D

    Debt neutral :) 27/03/17 from £40k:eek: in the hole 2012.
    Roadkill 17 £56.58 2016-£62.28 2015- £84.20)
    RYSAW17 £1900 2016 £2,535.16 2015 £1027.20
  • LadyP01
    LadyP01 Posts: 222
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    Hi uncannyscot and bobarella thank you for stopping by for support.

    Officially in the last 5 days of the month and i have £15.56 left, i only need £5 for slimming world and im working all week so thats perfect. I do however need some lunch prep items and conditioner that i was holding off until next months budget but as i have some left over this month i might aswell go and get £5 worth or bits.
    As my journeys gone on iv been looking into frugality which for me is going to be the key to success. My debt has been mounted from stupidly spending on a life style that i cant substain. Im in my late 20's and i used to have a massive disposable income, no rent to pay no food needed, no phone bill etc so i developed a life style that i liked, lots of holidays, clothes and nights out. Fast forward about 5-8 years and now i have more bills (lots less the the average person my age but bills none the less) but my spending never changed.
    Iv made a decision to not buy any beauty products until i have used up everything i already own... And baring a few items i think i can last till christmas. Im using items more sparingly, iv also switched items like baby oil for body lotion. I have loads of body lotion left over from christmas so my goal is to use them up before the baby oil... Saving of £2 roughly every month...small but it all adds up.
    I also brought asdas own hairspray for 80p and use it in a mix with my stronger more expensive one i already had before i started this. Love the cheaper one it smells like raspberries and make my room smell amazing when i use it, also leaves a lovely shine. By using both hair sprays iv managed to not buy any for two months... Saving of about £3-£5 per month.
    There my two savings im most proud of to reduce spending but by doing that across all beauty iv saved about £15 a month in products.

    Todays plan it to do a soa? So you can all see how im trying to get this debt gone... My debt free day is predicted at febuary 2022!! I refuse to still be in debt then, iv crunched some numbers and if i stay motivated i can make that may2018 even that date makes me feel quezzy.

    Be back tonight with my figures
  • LadyP01
    LadyP01 Posts: 222
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    This is my soa? I think thats the right term.

    I earn £1536 per month

    Bills
    Pension
    £70
    Rent
    £250
    Phone
    £15
    Help to buy----£200
    Loan
    £323.62

    Total_________£858.62

    Direct debits
    Christmas
    £50
    Presents
    £35
    Holidays
    £50
    Car stuff
    £60
    Clothes etc----£40

    Total_________£1093.62

    Cash bills
    Petrol
    £80
    Food
    £50
    Slimming/w---£40
    Social
    £100

    Total_________£1363.62

    Left over to put towards debt_____£172.38.

    In 5 months i will have a good savings pot to get that loan chuck paid off leaving me with £6000 left to pay.
    My clothes fund is to include hair cuts, shoes anything i may need for work or home. My plan is to try and not buy any clothes until i really cant wear anything i own anymore due to baggyness. Iv not touched this fund since starting this process so if it remains untouched i will put half of it in my debt repayment pot.

    Please feel free to give me some feedback and thoughts on the budget, its been tweeked a few times over. Lines i feel might get flagged is social, so this is eating out, meetings friends and activities to which i managed to cut this down to £40 and put £60 in the debt pot. Holiday is also one i imagine will get flagged. I booked them all before my LBM but i will need spending money so im saving a little every month so i have money rather then looking to borrow elsewhere for it.

    Looking forward to some feedback :)
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,445
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    Borrowing to save makes little financial sense so taking out a larger loan to keep some back in an emergency fund has cost you money unless the rate you are borrowing at is less than the rate you are getting for savings which is unlikely. Similarly having almost having £6k in savings whilst you have a debt of £16k is a mistake. Keeping £1k back for emergencies is sensible though but I would pay the rest off the loan now unless it is on a really low rate.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • LadyP01
    LadyP01 Posts: 222
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    Hey enthusiasticsaver thanks for the feedback... I took £360 out extra ok the loan fo create an emergency fund. I agree with your about financial sense but i felt i needed that cushion of unforseen circumstances to avoid me going backwards... Luckily i did as i had unexpected car troubles so instead of going into dispear i knew i could cover it qnd iv already put that money back.
    Im also thinking the same as u about the money i have saved so far, i didnt expect to have saved so much in just under 3 months, but im torn... Do i pay it straight to my loan? Or do i pay it off my loan and look for a smaller loan? Hence why iv given myself the 5 months for £10,000 as i know i can get £6000 0% interest but i know i cant get £10,000 at that rate.
  • enthusiasticsaver
    enthusiasticsaver Posts: 15,445
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    It may be better to make big chunks of overpayments rather than one big one of £10k. Often there is a one month interest penalty for early repayment and this is less if the balance has been reduced. Have you checked this? Personally I would pay it off in chunks of £2.5k providing there is no charge for overpayments.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • LadyP01
    LadyP01 Posts: 222
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    Today should be a nsd, ill be at work and iv always made my own lunch.
    Tonights plan if i get time is to have a search at interest rates on £10,000 and check my eligability to see if its worth doing a pay off of the current loan and moving to a lower rate.
    Also need to make a shopping list i think i have about 2 days worth of lunch stuff left.
  • LadyP01
    LadyP01 Posts: 222
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    Hey enthusiasticsaver, just seen your post. I will check the small print of my loan this evening and see what it says. Im sure theres no charge for paying overpayments as i checked but ill check over all the information.
  • LadyP01
    LadyP01 Posts: 222
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    So a NSD achieved today! Lunch list has been made, iv had a look around and i think if i get some jacket potatoes i can get another weeks lunch out of what i have.

    Also looked into the loan agreement and excellent advice, it seems i can make payments with no interest which is perfect and my apr % is based on the overall amount left to pay i believe so the more i pay off the lower the interest so i will be making a call and start making some payments.
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