Tips For Getting Out Of Debt

prettyblonde

Hello,

This is my first visit to this site. I have seen many of you that nearly have got all of their debts paid off and I was wondering how you all managed to do it?

I currently owe 15K and I hoping to pay it off in a maximum of 3 years. Pleasde can people post me some tips of useful advice to me as I really wanna be debt-free asap.

Thanks,

Kevicho

Hi, welcome to the site

What we normally do is get people to post a list of what they spend each month, ie food/taxes/mortgae/rent etc, then how much they earn wages/tax credits and then what they owe, to who and the aprs of those debts, so if you can do this asap (include everything!)

Then as a pack of hungry money saving wolves we try to find the best ways to cut down your expenses so you have more money to throw at the debts

Welcome to a more disciplined and prudent life

davels

Hi Ms Pretty Blonde,

Nice name!

1) Get a higher paid job, do more overtime at your currently. Or depending on your circumstances, look at a 2nd part time job. £6 /per hour in a bar over the period of a 1 yr will really put a dent in your debts.

2) Sell your old junk at car boot sales or on eBay - your junk is another's persons treasure as a grand philosopher once said (probably)

3) Live below your means. Check out the other boards on the site to find out what this is all about... do you eat take-aways? Do you drink or smoke? Do you buy Heinz beans or can you suffice with Tesco value ones? Do you spend your Tesco clubcard vouchers in store or do you use them with the Tesco Deals which make then x3 times more valuable? You get my drift... think wisely about your spending.

4) Payment protection for your loans & credit cards - do you have this? Cancel it. Can you talk to your creditors and explain the situation with a view to getting your payments reduced? Often, creditors will freeze interest if they are in a sympathetic mood & appreciate your honestly and pre warning. It's worth a try.

5) Look around the different forums here on MSE, it's amazing the amount of savings you can achieve so easily - even little things like changing your gas/elec supplier and your telephone supplier... it makes a huge, huge difference.

There are truly so many ways you can do this, MSE will help you so much. You have to find it in you to make this a personal project that you want to make work - if you can do that, you'll feel the buzz&excitment of paying off debts & making money.

Hope this helps - best of luck

-dls-

Tondella

If you have £15k of debts to pay off in three years then you need to find £5k per year (roughly). You can get this "spare" money from decreasing the amount of money you spend elsewhere each month and increasing the amount of money you earn/make. So, why not start off by posting here what comes into your bank each month and where it goes, then we can start suggesting how to improve it.

Whilst your debts are being paid off it helps to have them on the best interest rates possible, so if you can find out and post for each debt: the amount you owe, the interest rate it attracts, the minimum repayment it attracts each month (or for loans the monthly repayment and number of payments left to make). If you don't have the info to hand then phoning up the companies and asking them for the information will work.

prettyblonde

Hello,

Well to cut a long story short, me and my partner split whats left each month after we have paid bills (all there is is rent, council tax, elec & food) and we each have £600 spare each month.

Here are my debts:

Overdrafts
Smile £1980 no Interest
Barclays £2995.38 no Interest
Halifax £1460 no interest
RBS £1230.00 no Interest

Credit Cards
Egg £961.45 15.9% interest pay minimum payment (2% of bal)
Capital One937.02 29.9% pay minimum payment
Halifax Credit Card £4637.26 10.8% pay minimum payment

Loans
HSBC £1476.51 14.8% interest pay £30 a mth
HFC £511.42 If pay off by 14th June 0% interest otherwise 22%, pay £20.38 per month

I have applied and been approved for a mint card with 0% on bal transfer and purchases until Novemeber 06, am awaiting on the credit limit, was planning on bal transfering capital one and if have spare credit left pay hfc.

what you all think?

am paying £400 a month on debt leaving £200 for myself. I have a student loan too but am not due to start paying until i earn 15K

fairylights_2

Without knowing what interest you're paying on these debts, it's difficult to be terribly specific. Essentially, on top of whatever you're currently paying, you'll need to find another £500 a month to pay it off (500 x 12 = 6000 x 3 = £18000 - which should allow some extra for interest. I don't know if this is feasible for you, but that's the barebones. If you can switch any credit card debt to low or 0% aprs you'll do yourself a favour, but at the end of the day you're going to need to have at least £15k spare. For us that's meant LOTS of very rigid budgeting, planning, cutting back and working harder. We've found the best thing as debt free day gets closer is realising that were we to carry on living the way we do (and we're not REALLY scrooge-like, most of the time!) how much we'll have in savings in six months time.

Good luck!

fairylights_2

See? now THAT's what happens when you have to go change a nappy halfway through posting :rolleyes: . Apologies for irrelevance - and I promise I washed my hands before I came back to finish typing

fairylights_2

prettyblonde wrote:

Credit Cards[/U][/B]
Egg £961.45 15.9% interest pay minimum payment (2% of bal)
Capital One937.02 29.9% pay minimum payment
Halifax Credit Card £4637.26 10.8% pay minimum payment

Loans
HSBC £1476.51 14.8% interest pay £30 a mth
HFC £511.42 If pay off by 14th June 0% interest otherwise 22%, pay £20.38 per month

:eek: on your capone apr! that's HORRENDOUS! That'll be better on your 0%er. I would suggest you also take a look at whether your electric is the best deal you've got - and be aware on what you spend outside of the food you've accounted for. No Phone? no transport? insurance? clothing? With £600 spare you could clear lots of little bits.

Perhaps the best thing to is enter all your debts into the snowball calculator and see what it advises.

This is my favourite one, but others seem to swear by this one

prettyblonde

FairyLights,

How long has it taken you to get to where you are now? Did you do it yourself or through say payplan or cccs?

fairylights_2

We did it ourselves - we started before we found this site and didn't even know about payplan/cccs. I think it's been a couple of years since the very worst point, but only about a year since we really cracked down. It's quite amazing, when you think OH brings home about £800 a month, I have a part time job bringing in between £50-200 a month depending on how hard I work, then child benefit, tax credits and £100 a month from inlaws (who set this up into OH's account when he moved in with me, claiming that's what he cost per month in groceries alone, so he should bring it with him! That was five years ago, and they haven't stopped it yet! They are VERY wealthy, so don't make me feel guilty about this. I probably spend half of that on diesel each month going over to see them!!!!) I think our monthly income comes to about £1600. We budget REALLY tightly, and don't suffer particularly badly, compared to some here. We hadn't got to the collection agencies on anything, just the concerned call from Mastercard to find out where last month's payment was. We could afford to pay it off, it was just finding the discipline to do so.

Also, use Martin's budget planner - at the top of the page, by Where to start with problem debts - it's been our lifeline for limiting our spending and adjusting the budget as nurseries fees go up and insurance goes down.

Good luck!

skintchick

Well to cut a long story short, me and my partner split whats left each month after we have paid bills (all there is is rent, council tax, elec & food) and we each have £600 spare each month.

How much is your leccy? What do you spend on food? You might be able to cut down, in fact almost certainly will be able to as most people who come on here spend loads on food - until we get our hands on them!!


am paying £400 a month on debt leaving £200 for myself. I have a student loan too but am not due to start paying until i earn 15K[/QUOTE]

What do you need that £200 for? If all your food is spent, then surely you don;t need £50 a week? Reckon you could halve that and throw the other £100 at your debts.

Have you tried keeping a spending diary for a week/mopnth, where you write down every single thing you spend, no matter how little? It might surprise you where it's all going!