How I'm taking control of my £164,893 debt

gingernutbizkit

Hi all,

I have been using this site for some time now but really spent a lot of time half-heartedly following the ideas and advice given. I start my money diet but never last longer than a few days. This time I'm going to be realistic - I'm often amazed by some of the people on MSE but I can not be as frugal as some of them are and trying to do so only makes me feel like a failure.

To start with I am going to outline my total debt (inc. Mortgage) and aim to pay off one debt at a time. Once one is gone then I will use the extra money to go to the next debt. I will pay off my loans/overdrafts in order of interest rate and keep my mortgage payments bubbling over.

This takes my debt free date from March 2032 (date my 25 year mortgage should end) to March 2022. The interest over that period will cost me £81,442.

Here's the debt details for you all.....

Mortgage £150,000 @ 6.2% - interest only but can repay 10% pa. Next renewal date March 2010.

Northern Rock £9840 @ 5.8%

Car Loan £3753 @ 0%

Alliance and Leicester Overdraft £1000 @ 0%

Lloyds Overdraft £300 @ 0% - Keen to pay this off first though as keeping the account open costs me £15pcm.

I also have £5600 in a cash ISA at 6.3% which I aim to add to at the start of the next financial year.

By the start of 2009 I may be in a better financial position and be able to make extra payments. i will also have more time on my hands and although i can not get another job I might be able to do the odd agency shift, surveys, mystery shopping etc..... again I don't want to commit to anything I'm not really going to do

Ging x

gingernutbizkit

WOW!!!!!

I'm really excited. Having decided just yesterday to get focused I received a letter today to say that my mortgage rate has been reduced

My payment will be £65 pcm less but I'm going to keep paying this amount to try and pay it off quicker.

This takes my debt free date to December 2020 and the total interest to be paid is £51,398

A total saving of 21 months and over £30,000 and without having to make any changes. :j :j :j

clearmydebts

Hiya,

Great start to reducing your debt by getting a reduction on your mortgage! Just wanted to say hi and wish you the best of luck with it.

GettingThingsDone

Hi Ging,

I can not be as frugal as some of them are and trying to do so only makes me feel like a failure

Everyone's situation is different - don't beat yourself up about it. We're all in this together

Why not post up your SOA in case there are things we can help you save money on that you can then put towards your debt? Also, do you have anything you can sell to raise some extra cash - again, it all helps get down the debt. Have you joined any of the challenges - that can help you keep focus too. As you know, it all adds up...

Lloyds Overdraft £300 @ 0% - Keen to pay this off first though as keeping the account open costs me £15pcm.

That's not really 0% then . I'd definitely pay that off asap and go back to a 'free' account, unless the £15pcm benefits are actually worth it.

Good luck and keep posting!

gtd

carrottopsuk

gingernutbizkit wrote: »

Hi all,

I also have £5600 in a cash ISA at 6.3% which I aim to add to at the start of the next financial year.

Ging x

Hi Gingernut,

Just wondering whether it may be more beneficial using some of your ISA savings to pay some of your debt??

I'm no expert so you may need to look into whether it's the best option or not but others may be able to advise you properly.

[Deleted User]

Just popped in to wish you the best of luck.
At the very least I would recommend you pay of your £300 overdraft (that is costing you £15/month) with the money in your ISA.
Try posting your SOA and see if people can tweak your finances in more ways than you think! x

gallygirl

Em, was going to say I don't want to frighten you, however I do want to frighten you into taking some action.

Your Lloyds account at £15 a month is actually 60% interest :eek::eek::eek::eek::eek::eek:

Get it paid off!!!!!!

Exerbusi

Good effort Ging!

I too have decided to do something about my debts, and am finding the whole thing really rewarding. To some extent, it has taken over my life. Not to obsession levels, but I am constantly weighing up purchases and wondering whether I can get a better deal elsewhere!

gingernutbizkit

Hi all, thanks a lot for your words of encouragement.

Gallygirl - thanks a lot for working out the % rate for my overdraft - definately need to get that paid off!

Gettingthingsdone - not sure I'm quite ready yet to post my SOA - partly because I haven't done it but mostly because I'm sure it'll open me up to plenty of criticism :rotfl:

Carrottopsuk - as my ISA pays a higher rate of interest than my debts cost me it is not worth paying off my debts with the money in my ISA - at least I think that's right.

Had some good news today - my income has gone up :T That's two good pieces of financial news this week..... looking forward to the third :rotfl:

Sharon87

Well congrats on the good news. Seems like you're getting yourself sorted.

Why don't you join the ebay challenge if you've got unwanted items that are cluttering your house, the profits can then go to pay off your debts.

Gemmzie

I doubt the ISA is paying 60% therefore, I'd dump £300 of it to clear the overdraft and get that one gone!