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  • FIRST POST
    • boxofpaws
    • By boxofpaws 15th Jan 17, 1:26 PM
    • 406Posts
    • 1,740Thanks
    boxofpaws
    Boxofpaws is keeping it simple
    • #1
    • 15th Jan 17, 1:26 PM
    Boxofpaws is keeping it simple 15th Jan 17 at 1:26 PM
    Hello lovely MSE-ers!,


    I have been a user of this site for many years but created a new username on 3rd Jan because I had doubled the debt and I was so embarrassed!


    So here I am, £40k+ in debt. The reasons (excuses) are many and varied, so I won't dwell on the past. However, our current situation is good, good income, happy marriage, nice home and we can really make good in-roads to this accumulated debt.


    In the past, we have failed at debt busting, and I think it was down to the plan being too punishing and too complicated. This time, I will set us achievable targets and make it easy to hit them.


    Thanks to anyone who has read so far, I will report back later with my plan.


    Boxofpaws x
Page 19
    • JoJoC
    • By JoJoC 14th Aug 17, 9:27 AM
    • 1,275 Posts
    • 4,151 Thanks
    JoJoC
    I wish I had advice to give you but alas, i am no expert on money matters (obviously, or I wouldn't be in my situation!). One thing i would say is that I'd stay well clear of consolodating everything into your mortgage - that seems like a really dangerous move and will change your debt from unsecured (credit card) to secured (mortgage) meaning if you can't pay it, you can lose your house.

    Also, on credit cards there's always the chance of getting these onto 0% which would be a better rate than any mortgage could ever offer you. You might not be able to right now but the more you clear off your debt, the more chance you might have of getting a 0% card and hammering the debt down further.

    Sorry I can't offer any more wisdom than that - i find myself regularly in the clueless camp or not being sure what financial move to make but I'm sure someone else will come along with a bit more knowledge.

    All the best.
    CC1: £3804.52 / £3554.32 £250.20 paid | CC2:£5027.53 / £4829.43 £245 paid | Loan: £15,000 / £12,369.24 (£2,631.76 paid)

    July debt total: £23,832.05 | New debt total: £20,752 | Total debt paid: £3,080 (13%)
    *My debt busting and savings diary*
    • boxofpaws
    • By boxofpaws 14th Aug 17, 8:59 PM
    • 406 Posts
    • 1,740 Thanks
    boxofpaws
    Hi Paws,

    How did you kill the neighbours hanging basket ? Made me smile .

    As for your questions above , I am no expert on these matters.

    If it was me I would want to get rid of the car loan and the pcp payment if I could.
    Originally posted by Cumbria lass
    They left my husband in charge of watering them! They went away last Saturday and on Tuesday I asked him when he had watered them. To which he replied "but it's been raining". Actual face palm.

    The good news is that they have revived! I did take the worst one down and put it in intensive care and dead headed it and it's come back to life. So they've now given me back the one I bought them, so I can watch it slowly die in our garden.

    Are all your debts on your credit file? I know sometimes that car loans are not so in terms of debts on the credit file you might not appear to owe as much.

    What interest rate are your cards? Just wondering how much interest you would end up paying if you put the PCP loan on the cards and took 6 months or so to pay it off.

    I agree with not remortgaging to pay off debt, what if that extra bit added to the mortgage ended in disaster. At least when debt is on credit cards you can always default and go on reduced payments but you cant with a mortgage. Plus having a couple of credit cards gives you clear targets to aim for like clearing CC1 or 2 rather than paying off mortgage and not paying as much because eventually it will all be paid off at the end of the term anyway.
    Originally posted by Eager_Elephant
    All the credit cards are 0%. Loans - The PCP one might not show on our credit file but that needs settling before we remortgage in any case. The other one is a normal personal loan with a low interest rate (3% I think, somehow Halifax throw low interest loan offerings at the husband). So the car loan is actually the most interest. There are no early redemption or overpayment penalties either.

    You're right, I think I would be more motivated to pay off credit card than mortgage debt.

    I wish I had advice to give you but alas, i am no expert on money matters (obviously, or I wouldn't be in my situation!). One thing i would say is that I'd stay well clear of consolodating everything into your mortgage - that seems like a really dangerous move and will change your debt from unsecured (credit card) to secured (mortgage) meaning if you can't pay it, you can lose your house.

    Also, on credit cards there's always the chance of getting these onto 0% which would be a better rate than any mortgage could ever offer you. You might not be able to right now but the more you clear off your debt, the more chance you might have of getting a 0% card and hammering the debt down further.

    Sorry I can't offer any more wisdom than that - i find myself regularly in the clueless camp or not being sure what financial move to make but I'm sure someone else will come along with a bit more knowledge.

    All the best.
    Originally posted by JoJoC
    All the credit cards are 0%, and we get balance transfer offers through all the time on existing cards that have available balances. I know you shouldn't rely on them but there is no reason to think that would stop. Having just cleared MBNA with a BT, I am 99% confident that they will offer us another transfer deal, which we could use for cash (to settle the PCP!)

    I know we're in a really fortunate position that we have a lot of choices of how to handle the debt. It would be a different story if the husband was facing redundancy so I am grateful we are so lucky.

    Thank you guys for the responses, really helpful.

    Paws
    Debt 03/01/17 = £42000
    Debt today = £30433
    • Cumbria lass
    • By Cumbria lass 14th Aug 17, 9:06 PM
    • 882 Posts
    • 4,489 Thanks
    Cumbria lass
    Re the hanging basket : sounds like something I would do, green fingered I am not.

    I think anything that you can do at 0% is better than paying interest . Would agree though about not putting it on your mortgage. Once the debt has gone and you realise how much less you can survive on , you can overpay your mortgage .
    Nov 2017 CC1 £3329 CC2 £600

    Debt Free Nov 2019: earlier if I have my way
    • boxofpaws
    • By boxofpaws 19th Aug 17, 11:45 AM
    • 406 Posts
    • 1,740 Thanks
    boxofpaws
    Good things since I last posted
    • Taken control of my diet a little. Been back to slimming world twice. I am not veyr overweight but I was fitter and healthier this time last year and want to get back to that. Hardly any drinking in the last 2 weeks
    • Went to the seaside last night, and not only resisted fish and chips on both money and health ground (drover home and cooked dinner at 10pm), we aso only spent £1.80 (the shrapnel in my purse) on the 2p machines. Had a lovely walk round the park and down the front instead.
    • My hair is feeling better from giving it a bit of a rest.
    • Have been exercising regularly. 3 weights sessions this week and I have quite enjoyed them.
    • Have been seeking a new weights deck for ages. They are about £150 new and about £60-70 2nd hand. Managed to pick one up after months of searching on ebay and gumtree for £20. Its a bit scabby but will do the job. If I make full use of it, I could upgrade it to a prettier one next year.
    • Am down to 9st 11 today.
    • My job is actually going really well now. At moments it gets stressful but i feel like I can handle that now. Also, it encourages felxible working, so I feel like my work/lie balance is improving.
    • The husband has had a total of 7 overtime shifts in the last few weeks now, which is aoround £1000.
    • Husband has cleaned my car, inside and out.
    • Balance transfer all gone through. Final payment of £42 to MBNA will clear that account. Then I can use it to settle to PCP loan.
    • I'm feeling really happy. Not sure what thats all about, maybe I feel like things are going our way for one reason or another. Lets make the most of it.


    Bad Things since I last posted
    • The barbecue has run out of gas. I promised my friends barbecued chicken tonight.
    • In addition to the superfluous spends this month, we have paid out recently annual insurances on both cars and the house, plus paid for my car's annual service, so the coffers are actually empty. Nothing left in the EF.
    Thank the heavens it is payday on Monday


    To do today - the husband is on o/t so have the house to myself
    Clear out the cupboard in the front bedroom thats giving me nightmares
    Clean out 2 little drawers in the dining room with paperwork in them
    Tidy up front and back flower beds.
    Sort out hanging baskets. (without killing them)
    Get on top of washing and ironing.
    Do a weights workout - arms and legs
    Do 2 rounds of tabata
    Get gas for the barbecue.
    Prepare dinner for friends
    Buy any extra wine/food we need.
    Clean out 1 kitchen cupboard.
    Debt 03/01/17 = £42000
    Debt today = £30433
    • Cumbria lass
    • By Cumbria lass 19th Aug 17, 4:39 PM
    • 882 Posts
    • 4,489 Thanks
    Cumbria lass
    Wow what a list I hope you get it all done.

    There is always some social on your thread , a bit like me I couldn't cut that out completely!
    My car insurance, mot and service are due this month , my parents are treating me to the mot and service , just the insurance to do.

    Glad you sorted the PCP .
    Enjoy the barbecued chicken .
    Nov 2017 CC1 £3329 CC2 £600

    Debt Free Nov 2019: earlier if I have my way
    • boxofpaws
    • By boxofpaws 20th Aug 17, 9:13 AM
    • 406 Posts
    • 1,740 Thanks
    boxofpaws
    Re the hanging basket : sounds like something I would do, green fingered I am not.

    I think anything that you can do at 0% is better than paying interest . Would agree though about not putting it on your mortgage. Once the debt has gone and you realise how much less you can survive on , you can overpay your mortgage .
    Originally posted by Cumbria lass
    I think I have mentally formulated a plan now, using all the advice on here. You're right, it would be pure madness to put it onto the mortgage.

    Wow what a list I hope you get it all done.

    There is always some social on your thread , a bit like me I couldn't cut that out completely!
    My car insurance, mot and service are due this month , my parents are treating me to the mot and service , just the insurance to do.

    Glad you sorted the PCP .
    Enjoy the barbecued chicken .
    Originally posted by Cumbria lass
    A bit worse for wear this morning. Currently snuggled up in bed with my iPad, feeling a bit sorry for myself. At least I wasn't sick into a hedge.


    Clear out the cupboard in the front bedroom thats giving me nightmares - not done, cleaned out living room cupboard instead. Which was astonishing
    Clean out 2 little drawers in the dining room with paperwork in them - done
    Tidy up front and back flower beds. - Done, but might do a bit more gardening later
    Sort out hanging baskets. (without killing them) - done
    Get on top of washing and ironing. Mostly done
    Do a weights workout - arms and legs - did half, ran out of time
    Do 2 rounds of tabata - not done
    Get gas for the barbecue. - done
    Prepare dinner for friends - done
    Buy any extra wine/food we need.- done
    Clean out 1 kitchen cupboard.- not done but thoroughly cleaned house,washed cupboard doors in kitchen, vacced, dusted, mopped

    Happy Sunday everyone!
    Debt 03/01/17 = £42000
    Debt today = £30433
    • Cumbria lass
    • By Cumbria lass 20th Aug 17, 2:37 PM
    • 882 Posts
    • 4,489 Thanks
    Cumbria lass
    Nearly spat my tea out at "at least I wasn't sick in the hedge "!

    How have things progressed with hubby's job ? Keep forgetting to ask.

    Hope you are feeling less dodgy .
    Nov 2017 CC1 £3329 CC2 £600

    Debt Free Nov 2019: earlier if I have my way
    • JoJoC
    • By JoJoC 21st Aug 17, 8:41 AM
    • 1,275 Posts
    • 4,151 Thanks
    JoJoC
    I loved your positive update the other day BoP - sounds like things are on the up and it's nice to see things ticking along nicely.

    Well done for not being sick in a hedge

    Glad hubby is getting overtime - mine is much the same and working almost all the time but it's good for the old bank balance and may as well take it while it's on offer. It isn't always available.

    Hope you manage to get through your list while feeling a bit under the weather
    CC1: £3804.52 / £3554.32 £250.20 paid | CC2:£5027.53 / £4829.43 £245 paid | Loan: £15,000 / £12,369.24 (£2,631.76 paid)

    July debt total: £23,832.05 | New debt total: £20,752 | Total debt paid: £3,080 (13%)
    *My debt busting and savings diary*
    • EssexHebridean
    • By EssexHebridean 23rd Aug 17, 1:16 PM
    • 8,199 Posts
    • 43,429 Thanks
    EssexHebridean
    Got to love the sort of night out after which not being sick into a hedge becomes an achievement! Love it!

    It sounds like you've already realised that even contemplating turning unsecured debt into secured by adding it to the mortgage is madness in its purest form so well done for saving me that lecture!

    In your shoes I would:
    - Work out the monthly amount you need to set aside to pay the balloon on the PCP and get that saved from now.
    - Leave the loan to trickle along for the time being - it's accounted for and you're just paying it so don't worry too much about that one for now - it's affordable and some.
    - Pay the minimum plus anything else you can scrounge together on the cards until the PCP has gone, then revert to throwing everything spare at the cards with the addition of the PCP money which you will no longer be paying out from January.
    - As soon as cards are cleared get shot of the loan, and then split your monthly surplus 50/50 between either OP'ing the mortgage if you deal allows, or saving towards a lump sum to clear the mortgage, and 50% inter a bolstered EF plus a "new car fund" as obviously you won't be wanting to take loans or finance to buy cars from now on, will you...!

    I know logic might say that if you can continue to bounce the cards on 0% deals then paying the loan off should be priority ahead of those, but I tend towards the feeling that getting the cards gone is probably playing safer, and I suspect that it might look better when remortgage time comes along as well to have less numerous debts, if that makes sense?
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£656.45 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • Suffolk lass
    • By Suffolk lass 23rd Aug 17, 8:44 PM
    • 1,584 Posts
    • 18,061 Thanks
    Suffolk lass
    Hello Paws, I'm just back from our holiday and have just caught up on your diary. My two penny-worth is similar to EssexHebridean but slightly different.

    In your shoes, I would reduce the repayments on your 0% credit cards to a round figure, just above the minimum payment - so maybe £100 per month where the minimum payment is £77.60 (for example). If you contact them, they will change your payment to a fixed amount, if you ask, as long as it exceeds the minimum.

    Then save all the extra to make that final car payment in December. I would also round that £161 up to £200 per month, so that residual capital payment is also coming down as you go.

    Then I would look at the dates your 0% deals expire and where you are with that car loan, with a view to a bit of consolidation at a suitable point. That might mean amalgamating two or more credit card balances or it might mean taking the residue of the car loan into a cash advance 0% deal.

    Only when those two interest-paying accounts are 0-ised, would I start paying the credit cards down. I would not put everything into them all, spreading across all four. I would systematically hit them one at a time, based on the dates the deals expire, obviously attacking the shortest duration first.

    I would not use all my available money on this, as I think you need some incentives. So in addition:

    I would also look to "Tilly-tidy" your bank balance to a round figure every couple of days, putting that money in a savings account to build that emergency fund (I do mine to the nearest £50 at the moment, but I don't have the holiday credit card until next month)

    And I would round up that mortgage payment to the next hundred with a standing instruction to the provider to overpay the capital repayment, not advance pay the interest (some are sneaky).

    There you go, more like a pound's worth! - BTW I thought I was going to have to chip in over the secured vs unsecured loan issue from Italy (!). That is a complete no-no. Martin is very clear in his guidance that you do not do this.

    Also, when you do look to remortgage, you want an account that lets you overpay without penalty, if possible, or overpay up to 10% of your balance per annum without penalty. By then you will be almost ready to start hammering it!
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2017 #64 - £9,260.94 saved (84.19%) after October - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 78.56% including stores after October
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • boxofpaws
    • By boxofpaws 27th Aug 17, 1:53 PM
    • 406 Posts
    • 1,740 Thanks
    boxofpaws
    Nearly spat my tea out at "at least I wasn't sick in the hedge "!

    How have things progressed with hubby's job ? Keep forgetting to ask.

    Hope you are feeling less dodgy .
    Originally posted by Cumbria lass

    Thank you for asking Cumbria Lass, things seem to be improving with his job. He definitely wont be made redundant and now its looking more and more likely that his hours might not be reduced. We'll see. He's getting loads of overtime which is a huge help. I keep telling him he doesnt need to do it, but I dont mean it and am secretly delighted he is flogging himself.

    I loved your positive update the other day BoP - sounds like things are on the up and it's nice to see things ticking along nicely.

    Well done for not being sick in a hedge

    Glad hubby is getting overtime - mine is much the same and working almost all the time but it's good for the old bank balance and may as well take it while it's on offer. It isn't always available.

    Hope you manage to get through your list while feeling a bit under the weather
    Originally posted by JoJoC

    Thank you. Of course I have done exactly the same thing this weekend.

    Got to love the sort of night out after which not being sick into a hedge becomes an achievement! Love it!

    It sounds like you've already realised that even contemplating turning unsecured debt into secured by adding it to the mortgage is madness in its purest form so well done for saving me that lecture!

    In your shoes I would:
    - Work out the monthly amount you need to set aside to pay the balloon on the PCP and get that saved from now.
    - Leave the loan to trickle along for the time being - it's accounted for and you're just paying it so don't worry too much about that one for now - it's affordable and some.
    - Pay the minimum plus anything else you can scrounge together on the cards until the PCP has gone, then revert to throwing everything spare at the cards with the addition of the PCP money which you will no longer be paying out from January.
    - As soon as cards are cleared get shot of the loan, and then split your monthly surplus 50/50 between either OP'ing the mortgage if you deal allows, or saving towards a lump sum to clear the mortgage, and 50% inter a bolstered EF plus a "new car fund" as obviously you won't be wanting to take loans or finance to buy cars from now on, will you...!

    I know logic might say that if you can continue to bounce the cards on 0% deals then paying the loan off should be priority ahead of those, but I tend towards the feeling that getting the cards gone is probably playing safer, and I suspect that it might look better when remortgage time comes along as well to have less numerous debts, if that makes sense?
    Originally posted by EssexHebridean

    Thank you Essex Hebridian, all good advice. However, what you are not banking on is how LAZY i am and how easily I spend money. What would actually happen would be that I would put my cc payments down to minimums, then save the money for the PCP payment, and then SPEND the money on a holiday and then put the PCP on a credit card.


    Well, it might not be that extreme, but I know in the past when I have tried to save money to pay off debts later, I just havent, hence being in debt for so blooming long.
    Debt 03/01/17 = £42000
    Debt today = £30433
    • boxofpaws
    • By boxofpaws 27th Aug 17, 2:02 PM
    • 406 Posts
    • 1,740 Thanks
    boxofpaws
    Hello Paws, I'm just back from our holiday and have just caught up on your diary. My two penny-worth is similar to EssexHebridean but slightly different.

    In your shoes, I would reduce the repayments on your 0% credit cards to a round figure, just above the minimum payment - so maybe £100 per month where the minimum payment is £77.60 (for example). If you contact them, they will change your payment to a fixed amount, if you ask, as long as it exceeds the minimum.

    Then save all the extra to make that final car payment in December. I would also round that £161 up to £200 per month, so that residual capital payment is also coming down as you go.

    Then I would look at the dates your 0% deals expire and where you are with that car loan, with a view to a bit of consolidation at a suitable point. That might mean amalgamating two or more credit card balances or it might mean taking the residue of the car loan into a cash advance 0% deal.

    Only when those two interest-paying accounts are 0-ised, would I start paying the credit cards down. I would not put everything into them all, spreading across all four. I would systematically hit them one at a time, based on the dates the deals expire, obviously attacking the shortest duration first.

    I would not use all my available money on this, as I think you need some incentives. So in addition:

    I would also look to "Tilly-tidy" your bank balance to a round figure every couple of days, putting that money in a savings account to build that emergency fund (I do mine to the nearest £50 at the moment, but I don't have the holiday credit card until next month)

    And I would round up that mortgage payment to the next hundred with a standing instruction to the provider to overpay the capital repayment, not advance pay the interest (some are sneaky).

    There you go, more like a pound's worth! - BTW I thought I was going to have to chip in over the secured vs unsecured loan issue from Italy (!). That is a complete no-no. Martin is very clear in his guidance that you do not do this.

    Also, when you do look to remortgage, you want an account that lets you overpay without penalty, if possible, or overpay up to 10% of your balance per annum without penalty. By then you will be almost ready to start hammering it!
    Originally posted by Suffolk lass

    Sorry to alarm you in Italy! Bad Paws.


    I can never quite believe it when people on a forum go to these lengths to understand and advise on other people's issues. To take time out of your busy lives to stop and help.


    Apart from reducing cc payments to save for the PCP (which I know would be bad news for us), you have pretty much summed up some of the conclusions I was coming to. Consolidate onto 3 or 4 credit cards on 0% in around May, remortgage in August 2018, attack the CCs from there.


    I can scarcely let myself think about overpaying a mortgage yet but the thought that we could be in a position to overpay the mortgage from January 2020 seems like an actual possibility
    Debt 03/01/17 = £42000
    Debt today = £30433
    • EssexHebridean
    • By EssexHebridean 30th Aug 17, 4:14 PM
    • 8,199 Posts
    • 43,429 Thanks
    EssexHebridean
    Pfft - of course you can be in that position Paws - it's a bit like a friend of mine put it recently about losing weight - you have to reach the point where your desire to change things is greater than you desire to stuff in crisps. She's right, and it works on the money side of things too! if you REALLY want to get excited and maybe motivate yourself, get yourself a mortgage spreadsheet to play about with and start inputting some "what if we did this" figures...hours of fun!

    So come on then- what's the masterplan for sorting out the final PCP payment?
    MORTGAGE FREE 30/09/2016
    Sainsbugs 0% card: 22/12/16 £1229.00/£656.45 (20/11/17)
    SOA Calculator for DFW newbies: Stoozing.com SOA Calculator
    • Suffolk lass
    • By Suffolk lass 30th Aug 17, 10:31 PM
    • 1,584 Posts
    • 18,061 Thanks
    Suffolk lass
    Sorry to alarm you in Italy! Bad Paws.
    Originally posted by boxofpaws
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2017 #64 - £9,260.94 saved (84.19%) after October - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 78.56% including stores after October
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • Narola1976
    • By Narola1976 31st Aug 17, 7:49 AM
    • 93 Posts
    • 297 Thanks
    Narola1976
    Just popping my head in to say hi! and that you are doing very well overall. I love the support that people give on this site, taking the time to give thoughtful suggestions to help. I am not quite experienced enough yet, only on the start of my debt busting journey, so not a lot of wisdom to offer but plenty good at cheering you on!
    HSBC CC £7150.15 - £6524.68 ~~~ Barclay Card £7894.74 £7846.32 ~~~ MBNA 1 £10382.67 - £10272.67 ~~~ MBNA 2 £7214.28 - £7062.94 ~~~Argos £202.05 - £100.05 ~~~ HSBC Loan £399.27 - £0 ~~~ Hitachi Loan £24.12 - £0 ~~~ Car Loan £14745.60 - £14008.32
    TOTAL £48012.88 - £45814.98 (Paid £2197.90 so far)
    • Cumbria lass
    • By Cumbria lass 3rd Sep 17, 9:04 AM
    • 882 Posts
    • 4,489 Thanks
    Cumbria lass
    Chuffed Mr Paws is getting OT and that you miss him ! In all seriousness at least things have settled down for you now , and you can keep up the debt busting so it goes down and not up.

    It feels autumnal this morning in the North West, may need a coat on , sigh .
    Nov 2017 CC1 £3329 CC2 £600

    Debt Free Nov 2019: earlier if I have my way
    • Suffolk lass
    • By Suffolk lass 3rd Sep 17, 9:35 AM
    • 1,584 Posts
    • 18,061 Thanks
    Suffolk lass
    Pfft - of course you can be in that position Paws - it's a bit like a friend of mine put it recently about losing weight - you have to reach the point where your desire to change things is greater than you desire to stuff in crisps. She's right, and it works on the money side of things too! if you REALLY want to get excited and maybe motivate yourself, get yourself a mortgage spreadsheet to play about with and start inputting some "what if we did this" figures...hours of fun!

    So come on then- what's the masterplan for sorting out the final PCP payment?
    Originally posted by EssexHebridean
    I'm with Essex Heb on the hours of fun modelling mortgages front but I use the mortgage calculator on the Skipton BS site - it has three settings you can toggle and play with - slidey things on two axis' - honestly, who needs Netflix!
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2017 #64 - £9,260.94 saved (84.19%) after October - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 78.56% including stores after October
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • enthusiasticsaver
    • By enthusiasticsaver 3rd Sep 17, 11:07 AM
    • 4,827 Posts
    • 9,104 Thanks
    enthusiasticsaver
    I need to put some of my money thoughts down to try and make sense of them. I am hoping that someone out there can give me some good advice.


    I started this diary in January when it dawned on me that we were further in debt than we had ever been and remortgaging in 2018 was goin to be difficult with so much credit card debt. Clearly we are making some progress since then, the Big Number is going down but there is no real purpose to what I am doing.


    I am 40 in November. Husband is 46. So really, ideally, we want to have paid off the mortgage in 14 years. Current mortgage term is 18 years.


    Current debts are
    Car loan - £6478 - payments of £323 per month until March 2019.
    Car PCP loan. Payments of £161 from now until Nov 2017. December 2017 payment is £2016
    Credit cards (4) total £22500. We pay £800 - £900 to those every month (it was £900 but we will be reducing this to £800 from next month)


    Current mortgage payment is £1165. Outstanding when we come to mortgage will be £167,000. House value somewhere between £245 (nationwide calculator) - 266k (zoopla estimate) right now


    Summary

    £1165 mortgage pm £167k outstanding
    £1284 debt payments - £32k outstanding


    Questions
    How do we pay off PCP bubble?
    Option 1 - pay minimum off CCs for the next 3 months and save it up
    Option 2 - use the MBNA card that I have just cleared to do a cash transfer


    Next is about remortgaging. At the time of remortgaging, we will have around £20k of debt still on loans and credit cards


    Should we also clear the big car loan before we come to remortgage? Probably via the same method above, super balance transfer to pay off the remaining £3.5k that we will ave in May. This means having all our debts on credit cards. In terms of affordability, it would mean our commitment would be £600 per month on debts (£20k @ 3%). As opposed to £323 per month for the loan and PLUS £500 on credit cards

    We have £2300 to pay towards mortgage and debts each month Should we try to consolidate the remainder of the debt into the mortgage but go for a shorter term - ie pay £2k for 9 years per month? OR should we borrow on a mortgage the least we can get away with and keep the maximum on credit cards we can get away with and just overpay on the mortgage once the debts are cleared? That probably makes the most sense, i think consolidation might be dangerous.
    Consolidating the debt on to your mortgage would not be a good move but it does appear from reading later posts you have decided against that anyway. Consolidating debt just delays tackling it and making a plan to repay. Having paid off £10k since you started the diary in January it would seem an incredible waste to now up it by £30k to convert unsecured debt into secured. It may also entice you thinking you are debt free, which of course you aren't and allow you to go back to spending regardless without ever making a proper plan to overpay the mortgage. Of course there is also the hopefully unlikely now scenario of your husband losing his job and having a £1500- £2000 mortgage payment to make which would be huge.

    I'm normally not that keen on looking towards complete debt-freeness purely because we have so far to go and I prefer to just concentrate on the short term goals, but I think to get the right mortgage deal so that we arent paying off the mortgage into our 60's, we need to start planning this right now.


    Sorry for the long post, but I needed to do this as I think perhaps the answers are more obvious than I thought when I started!
    Originally posted by boxofpaws
    Two things other than advising against debt consolidation is that for the car pcp the best option is usually the cheapest. I think it was Suffolk lass who advised paying minimums on the credit cards and saving for the balloon payment in December. Also I would highly argue against these pcp deals for anyone who works on a tight budget. So many people seem to have fallen foul of these if they get into financial difficulties and they do not even seem to have the option of handing the car back. My recommendation would be always to buy a car outright, preferably in cash saved or 0% credit card or last resort low rate personal loan.

    Overpaying the mortgage should come when the unsecured debt is gone.
    2 weeks to go until early retirement in December . Debt free and mortgage free.

    I'm a Board Guide on the Debt-Free Wannabe, Mortgages, Banking and Budgeting boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Any views are mine and not the official line of moneysavingexpert.com. Pease remember, board guides don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com
    • Suffolk lass
    • By Suffolk lass 12th Oct 17, 7:10 PM
    • 1,584 Posts
    • 18,061 Thanks
    Suffolk lass
    I was wondering if you have sorted out that car loan I think you had to sort this month or next and if you are doing OK?
    MFiT T4 #2 update 42.67% after Q7 £5,465 behind where I should be
    Save £12k in 2017 #64 - £9,260.94 saved (84.19%) after October - my annual target is £11,000
    OS Grocery Challenge 2017 budget of £3,600 £3000 (reduced from Apr) - 78.56% including stores after October
    My DFD is http://forums.moneysavingexpert.com/showthread.php?t=5593594
    • boxofpaws
    • By boxofpaws 9th Dec 17, 3:07 PM
    • 406 Posts
    • 1,740 Thanks
    boxofpaws
    Forgive me, MSEers for I have sinned. Itís been 3 months and 11 days since my last confession.

    Bad.

    Since then I have
    • Been to London for the weekend
    • Had an 11 day holiday in Turkey
    • Had a long weekend in Reykjavik for my 40th
    • Had a takeaway every week
    • Bought countless coffees and lunches at work

    Bad.

    Effectively, I have paid off £1500 since I last posted out of a possible £5000.

    Bad.
    Debt 03/01/17 = £42000
    Debt today = £30433
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