My diary... becoming debt free whilst still having a life!!!

rob5497

1_step_closer wrote: »

Hiya

I have lots of debts which all add up to a whacking great total but cannot decide which one to tackle first. so will have to think about that!

Hi. My advice...start with the most expensive debt you have. It can be tempting to pay off the little ones first of all (and in some respects this does give you a certain sense of achievement!) but it does end up costing more in the longer term.

I still have a few debts left...5 to be precise...totalling just over £4K. About 18 months ago, it was nearer £20K. A few tips:

1. Decide how much you can afford to pay to your debts each month...always meet this amount (and of course, your minimum payments!) You can always pay more than the amount you have set aside, but not less.

2. List in order your most expensive debt through to your cheapest. Work from the bottom of this list upwards, writing next to the debt the minimum monthly payment.

3. When you get to the top of the list (and the most expensive debt) you should be paying the minimum payment plus what you have left over from your monthly debt allocation. This can be a bit confusing, so here's an example (figures are only an there to show the process and may not be realistic!)

Debt 1 - £1000 @25% Minimum Payment: £25
Debt 2 - £5000 @20% Minimum Payment: £100
Debt 3 - £2000 @15% Minimum Payment: £50
Debt 4 - £10000 @5% Minimum Payment: £200

Total minimum payments: £375
Monthly Debt Allocation: £500
Difference: £125

Most expensive debt is "Debt 1", so put the extra £125 to this debt, making a total of £150 a month. Hopefully you can see the effect...Debt 1 takes about 8 months to pay off instead of about 3 years...remember that each month you'll pay less interest, so over the term you'll save a great deal of money and be out of debt a lot sooner.

4. When you've paid off Debt 1, use the £150 from this and put it to Debt 2 and pay off this one at a rate of £250 a month instead of £100. And so on and so forth until you're clear, always using the amount from the previous debt to add to your minimum payment. Believe me, this works like a dream...I've shaved 4 years off my repayments and saved over £2000 in interest...that £2000 is now mine, not theirs!

8 months to go for me until I owe the grand total of nothing to nobody...how satisfying is that?! Your motivation? Plan what you'll spend all your salary on each month when you don't have any debts!

There is also a great book, it's called "Save a Fortune Fast"...£7.49 at Play.com. It'll pay for itself in a few days! Hope this helps!

Rob.

~Yorkshire_Belle~

rob5497 wrote: »

Your motivation? Plan what you'll spend all your salary on each month when you don't have any debts!
Rob.

I'm planning on saving!

savingholmes

£10 a day challenge is where you set out to do things differently so that you can earn or keep an extra £10 a day or sell stuff to earn an extra £10 a day. For me I've done a carboot, sold stuff to friends, joined lots of cashback sites - if you go via one of us we get paid a referral fee - written reviews, changed my hours at work - saving childcare costs, agreed to let DS come home alone one night a week, saving more childcare costs, bought news of the world for 90p on £5 tesco voucher offer days - so £4.10 up.... That sort of thing.... It does work but you have to understand loopholes on the cashback sites and not get hung up if you have to spend £10 to get £25 etc....

Hi all - after my 2 line message last night couldn't get internet to work again! So frustrating!

savingholmes

In deciding what debts to pay I would recommend that you use the snowball calculator at "whats the cost" -it's brill it tells you how much to pay, when, how much interest it will cost you and your debt free date!

Personally I am paying the smallest CCs off first so I can then focus on the bigger ones! Should be debt free within 2 years, if we relax a bit could be 3 years!

sistercas

savingholmes wrote: »

In deciding what debts to pay I would recommend that you use the snowball calculator at "whats the cost" -it's brill it tells you how much to pay, when, how much interest it will cost you and your debt free date!

Personally I am paying the smallest CCs off first so I can then focus on the bigger ones! Should be debt free within 2 years, if we relax a bit could be 3 years!

SH
i have done the snowball thing its brilliant isnt it? I have decided to throw money at the highest APR card 1st rather than the smallest debt I will be debt free in 20 months:j cant wait
BTW love your 40's basket very original :T

sistercas

how is everybody?
ruby , belle , SH hope everyone is having a peaceful weekend
I am just making some Twinks hobnobs there are in the oven and smell divine
chicken chow mein from rubber chicken for tea.
been to meadowhall with DD2 managed to get 2 more xmas presents (8 up to now)
update on the hobnobs.... nomnomnom- gorgeous

rubydoiwannabee

Hi!!

Wow!! Lots of activity on here yesterday and this morning. How are you all and thanks for coming along and contributing to my diary.

SC - twinks hobnobs!!! I can smell them from here. I hope they taste as nice as they sound.

the_juggler_2, irishchick, KarenWhitelaw, 1stepcloser, kidcat, Rob, et al a big WELCOME

So, yesterday I trotted off to my closest ASDA (about 16 miles away) to see what the new big shop was like and to browse a bit whilst doing my grocery shopping. The shop was lovely, it has everything, the BILL wasn't!!! I spent £40 over my weekly budget of £60!! About £25 or so I can account for on a birthday present and some clothes for DD, but the rest is extras that I couldn't resist. I will be doing the shopping online again next week!! I had a lovely time though and it was an ok way to spend my day off. The other downside was when I came out the heavens opened with a hailstorm like I have never seen before, I got absolutely soaked through and had to drive back and go straight to school to pick DD up. I didn't warm up for the rest of the day.

Today has been a treat, we didn't have anything planned and DS was up and out early with his mates. DH took charge of DD and they had lots of fun whilst I had a long soak in the bath and did my nails etc. It was glorious. No spend day today in light of yesterday.

So ladies and gents, are you all doing as well as SC and SH on buying christmas presents? I haven't got one yet!!! :eek: And feel very disorganised compared to you two.

Week one of work over and it wasn't so bad at all, only six weeks until half term!! ha ha.

I have far too much washing and ironing to do over this weekend, could be doing it now, but boy it is dull isn't it!!

Oh well, better trot off and do something, DD is pestering to go on cbeebies website. See you all later no doubt.

x

1_step_closer

Thanks Rob your help was very good! It is tempting to try and clear the small ones first but i will do what you suggested and any extra will check at the one with the monstrous apr. will take a while "gulp" but I suppose in the meantime other debts will come donw queitly too.

Thanks again!

savingholmes

1_step_closer wrote: »

Thanks Rob your help was very good! It is tempting to try and clear the small ones first but i will do what you suggested and any extra will check at the one with the monstrous apr. will take a while "gulp" but I suppose in the meantime other debts will come donw queitly too.

Thanks again!

Have you tried the snowball calculator - as that will help motivate you - it shows you the interest difference between different orders of paying things off!

Hello everyone else.

Thanks for all the positive comments all - I've given the 40s hamper and it went down a treat! I've also set up my payments to my cards so that I clear one debt completely next month, and another the month after. That will mean I've cleared 3 debts by Christmas and that I can focus on the other 2 card which have about £17K on them between them.... so things are improving although never as fast as we'd like!

Ruby - at least you know now you need to persist with the diary having had such a flood of interest! We'll be watching you:eek:

savingholmes

sistercas wrote: »

how is everybody?
ruby , belle , SH hope everyone is having a peaceful weekend
I am just making some Twinks hobnobs there are in the oven and smell divine
chicken chow mein from rubber chicken for tea.
been to meadowhall with DD2 managed to get 2 more xmas presents (8 up to now)
update on the hobnobs.... nomnomnom- gorgeous

Congrats on the home cooking and being so organised for Christmas. I feel virtuous as we had storecupboard meals today and I cooked a sausage casserole for tomorrow. Tescos finest sausages at 1.29 for 6 x 2 plus onions, mushrooms and a tin of peas and carrots. And Sainsbury's like to go on about a meal for a £5 - how much do they think people spend?

Done about 4 lots of washing on 30 - some washing still on the line overnight:rotfl: the some in the dryer:eek: and some waiting for me to pick it up from the wet pile on the floor!:p Oh well , good job life is for living!

Was hoping for NSD today but not achieved as had to replace battery on car - did get high street points tho - poss from pigsback or money back madness - not sure registered cards with one of them....

Anyway night, night all - s'pose I ought to try and hang the clothes somewhere to dry!:rotfl: