Debt Free Wannabe

simonbrown

Hello, I have decided to write a diary to help me put things out in the open, and hopefully get some encouraging words and helpful tips.

Debt has gradually built up under the “I’m already in debt another £50 won’t hurt” but it did.

The bad news

Expenditure per month

£599 – Mortgage/household bills split with wife.
£44 – Bus Pass
£40 - Mobile
£44 - Gym
£30 – Savings for holidays
£10 – Lottery (fingers crossed!)
£46.25 – Barclay Card Loan
£130 – Virgin Credit Card
£80 – Driving Lessons
£25 – Overdraft charges
£50 - Savings account (matures end of March)

Debts

£2600 on 0% interest for 12 months from Post Office
£2000 on 1.5% interest per month overdrawn Halifax Bank Account
£1146.40 on Barclay card loan over 3 years, which works out at £46.25 per month. Unfortunately this can't be paid off early.
£273.54 on 0% Virgin Credit Card that starts charging interest in April, I’ve been paying off £130 per month.
£105182.68 on a 22-year mortgage split with wife.

The good news

Wages - £1171 per month

I will get £506.93 + any interest collected at the end of March. This will also give me an extra £51 per month that I've been saving to get this.

I have signed up with greasy palm and they owe me £25.86 so far.

Mortgage is up for renewal in June, which means we can either reduce the length of term or take lower payments.

The plan...

Use money that I’ll get at the end of March to pay off Virgin Credit Card. This will leave me with an extra £130 per month.

Continue to sign up with gambling accounts on greasy palm, as they give more cashback than the money you need to open an account. Plus I might get lucky!

Questions

Where should I put the £363 from the March money?

Where should I throw the £181 per month I’ll be getting?

Should I lower the length of term on my mortgage in July to help me in the long run or lower the monthly payments to help me right now?

simonbrown

March to April


The bad news

Expenditure last month

£615 – Mortgage/household bills split with wife.
£44 – Bus Pass
£40 - Mobile
£44 - Gym
£30 – Savings for holidays
£10 – Lottery (fingers crossed!)
£46.25 – Barclay Card Loan
£130 – Virgin Credit Card
£80 – Driving Lessons
£25 – Overdraft charges
£50 – Birthday Present for May (thinking ahead!)
£35 – Put away for Christmas each month (again thinking ahead instead of panicking)
£71.74 – Signing up to gambling websites through Greasy Palm (If you want me to refer you PM me.)

Debts left

£2600 on 0% interest for 12 months from Post Office
£1800 on 1.5% interest per month overdrawn Halifax Bank Account
£1146.40 on Barclay card loan over 3 years, which works out at £46.25 per month. Unfortunately this can't be paid off early.
£104976.07 on a 22-year mortgage split with wife.

The good news

£1458 - Wages for last month due to being charged emergency tax for the last two months and an extra £93 for being on callout at work.

I’ve paid off my Virgin Credit card with the money I received from my savings, which leaves me with £181 per month to play with.

£25.86 - Greasy Palm They still owe me £72.24 but can't collect it till next month.

£123.90 - Winnings from gambling sites signed up with Greasy Palm.

Mortgage is up for renewal in June, which means we can either reduce the length of term or take lower payments.

I have also ended up with £763 after my savings had matured and various other things.

The plan...

Continue to sign up with gambling accounts on greasy palm, as they give more cashback than the money you need to open an account. Plus I might get even more lucky!

Questions

Where should I throw the £181 per month I’ll be getting?

What should I do with the £763, should I throw it at my overdraft because it is charging me or should put it into my ISA for next year?

Should I lower the length of term on my mortgage in July to help me in the long run or lower the monthly payments to help me right now?

simonbrown

I've made progress with this but feel as of I'm on the last couple of miles on the marathon...

Any ideas or thoughts would be welcome

November to December

The bad news

Expenditure last month

£555.25 – Mortgage/household bills split with wife.
£44 – Bus Pass
£48 - Mobile
£44 - Gym
£30 – Savings for holidays
£10 – Lottery (fingers crossed!)
£46.25 – Barclay Card Loan
£25 – Virgin Credit Card
£57 - Post Office Card (Starts charging interest in January)
£80 – Driving Lessons
£35 – Put away for Christmas each month (thinking ahead instead of panicking)
£300 Pot - Put away in a savings accounts, I do this until the end of the month and then throw as much as I can at my credit cards. I always like to keep a little back incase anything happens.

Debts left

£2100ish on 0% interest for 12 months from Post Office
£897 on Virgin Credit Card
£825ish left on Barclay card loan with 18 months left, which works out at £46.25 per month. Unfortunately this can't be paid off early.
£102876.22 on a 22-year mortgage split with wife.

The good news

£1338 - Wages

The Plan...

I have around £300 I can throw at my Virgin Credit Card at the end of the month as long as no problems arise. In December's pay check I should receive an extra couple of hundred pounds. Again I'll throw this at the Virgin Credit Card. Once this has been paid off, I'll the focus my efforts at the Post Office Card.

Long Term Plan...

After I've sorted these debts, I'd like to use the £300 Pot towards paying my mortgage off early.

Questions

Is there anyway I can ask to pay off the loan early? Or to pay off a larger chunk every month?

Any questions, advice or thoughts would be appreciated.

Thanks

euronorris

simonbrown wrote: »

Hello, I have decided to write a diary to help me put things out in the open, and hopefully get some encouraging words and helpful tips.

Debt has gradually built up under the “I’m already in debt another £50 won’t hurt” but it did.

The bad news

Expenditure per month

£599 – Mortgage/household bills split with wife.
£44 – Bus Pass
£40 - Mobile This can be reduced. Aim for 20 per month. Switch to Pay Go if needed.
£44 - Gym Do you actually use this? Most likely get rid of this as you can exercise for free.
£30 – Savings for holidays Can you afford a holiday at the moment?
£10 – Lottery (fingers crossed!) Scrap it, waste of money! How many times have you actually won and has this figure surpassed what you have spent on tickets? I doubt it.
£46.25 – Barclay Card Loan
£130 – Virgin Credit Card
£80 – Driving Lessons I understand how invaluable this can be, but you may want to put it on hold for a while.
£25 – Overdraft charges Are you incurring this every month? Or is this the interest on the O/D?
£50 - Savings account (matures end of March)

Debts

£2600 on 0% interest for 12 months from Post Office
£2000 on 1.5% interest per month overdrawn Halifax Bank Account
£1146.40 on Barclay card loan over 3 years, which works out at £46.25 per month. Unfortunately this can't be paid off early. Why not? What are the penalties involved here?
£273.54 on 0% Virgin Credit Card that starts charging interest in April, I’ve been paying off £130 per month.
£105182.68 on a 22-year mortgage split with wife.

The good news

Wages - £1171 per month

I will get £506.93 + any interest collected at the end of March. This will also give me an extra £51 per month that I've been saving to get this.

I have signed up with greasy palm and they owe me £25.86 so far. Sorry, I haven't heard of greasy palm. What is this?

Mortgage is up for renewal in June, which means we can either reduce the length of term or take lower payments.

The plan...

Use money that I’ll get at the end of March to pay off Virgin Credit Card. This will leave me with an extra £130 per month. If you are paying 130 pm at the moment then this should be paid by end of Jan anyway. Or, are you still spending on it?

Continue to sign up with gambling accounts on greasy palm, as they give more cashback than the money you need to open an account. Plus I might get lucky!

Questions

Where should I put the £363 from the March money? The debt with the highest APR. This will reduce the amount of interest you pay.

Where should I throw the £181 per month I’ll be getting? As above.

Should I lower the length of term on my mortgage in July to help me in the long run or lower the monthly payments to help me right now? I don't think you should lower the repayments as a) this will most likely increase the term and b) will certainly increase the amount of interest being paid. IF you can afford it, then I would lower the term on the mortgage. But look at your figures in depth and consider whether you can really afford it.[/QUOTE]

OK, I made a few comments / suggestions above but also wanted to ask if you find that you stick to this budget already, or not? If not, consider a spending diary where you write down every penny you spend. This will help you to identify problem areas.

Good luck!

euronorris

simonbrown wrote: »

I've made progress with this but feel as of I'm on the last couple of miles on the marathon...

Any ideas or thoughts would be welcome

November to December

The bad news

Expenditure last month

£555.25 – Mortgage/household bills split with wife.
£44 – Bus Pass
£48 - Mobile
£44 - Gym
£30 – Savings for holidays
£10 – Lottery (fingers crossed!)
£46.25 – Barclay Card Loan
£25 – Virgin Credit Card
£57 - Post Office Card (Starts charging interest in January)
£80 – Driving Lessons
£35 – Put away for Christmas each month (thinking ahead instead of panicking)
£300 Pot - Put away in a savings accounts, I do this until the end of the month and then throw as much as I can at my credit cards. I always like to keep a little back incase anything happens.

Debts left

£2100ish on 0% interest for 12 months from Post Office
£897 on Virgin Credit Card
£825ish left on Barclay card loan with 18 months left, which works out at £46.25 per month. Unfortunately this can't be paid off early.
£102876.22 on a 22-year mortgage split with wife.

The good news

£1338 - Wages

The Plan...

I have around £300 I can throw at my Virgin Credit Card at the end of the month as long as no problems arise. In December's pay check I should receive an extra couple of hundred pounds. Again I'll throw this at the Virgin Credit Card. Once this has been paid off, I'll the focus my efforts at the Post Office Card.

Long Term Plan...

After I've sorted these debts, I'd like to use the £300 Pot towards paying my mortgage off early.

Questions

Is there anyway I can ask to pay off the loan early? Or to pay off a larger chunk every month? You need to check the contract for this information, and, if still unclear ask the provider.

Any questions, advice or thoughts would be appreciated.

Thanks

It seems that the Virgin CC balance has increased so far, rather than decreasing. I would strongly recommend a spending diary to recognise where your money is going and make appropriate changes.

You may also find it useful to use the SOA calculator: http://www.makesenseofcards.com/soacalc.html

This will organise your income and outgoings in an easier to read format. It should also help you to keep track.

Have you tried the snowball calculator yet?http://www.whatsthecost.com/snowball.aspx

simonbrown

Thanks for the reply euronorris.

You seem to have commented on the previous entry, instead of the current one but most of the things still apply.

Mobile @ £40 - I will check whether I can be moved onto a lower pricing plan. If not will move on to pay as you go. Does anybody know if you can keep your number when doing this?

Gym @ £44 - I go to the gym at least three times a week, I've found it helps me not go out after work and I probably save money in the long run.

Savings for Holiday @ £30 – Probably can't afford the holiday at the moment, will look to use this elsewhere.

Lottery @ £10 – I've probably won about £30 in the last 2 years. So no!

Driving Lessons @ £80 – I will look into putting these on hold for 6 months. But I've spent so much money getting this far I didn't want to lose momentum. Even after I've passed I'll be car sharing, so my costs for travelling should remain similar, with the cost of the bus pass every 4 weeks taken in to account.

Barclay Card @ £825ish - I will check whether I can pay off more with Barclay Card. As this £46.25 a month would be useful when the loan is gone.

The virgin credit card has increased because I did a balance transfer to clear my overdraft, this saved me £25/30 a month in OD charges. Which I'm using to pay off the virgin credit card.

I will look at posting a SOA, if only to format the data a bit nicer!

Thanks

euronorris

simonbrown wrote: »

Thanks for the reply euronorris.

You seem to have commented on the previous entry, instead of the current one but most of the things still apply. Yeah, I did, having a blonde moment! lol

Mobile @ £40 - I will check whether I can be moved onto a lower pricing plan. If not will move on to pay as you go. Does anybody know if you can keep your number when doing this? I'm not sure, if you can, they will probably charge for it.

Gym @ £44 - I go to the gym at least three times a week, I've found it helps me not go out after work and I probably save money in the long run. If you are using it that much and it's acting as a deterrant for going out then maybe you should consider keeping it. It's up to you. You just have to find the right balance for you.

Savings for Holiday @ £30 – Probably can't afford the holiday at the moment, will look to use this elsewhere. Perhaps you can take advantage of the 9 quid hotel rooms with travellodge at the moment. Then you and the wife could still have some time away together, but much cheaper!

Lottery @ £10 – I've probably won about £30 in the last 2 years. So no! Definitely needs to go then. Or limit this to one ticket a week maximum

Driving Lessons @ £80 – I will look into putting these on hold for 6 months. But I've spent so much money getting this far I didn't want to lose momentum. Even after I've passed I'll be car sharing, so my costs for travelling should remain similar, with the cost of the bus pass every 4 weeks taken in to account. This one is entirely up to you as I understand how invaluable this skill can be. If you're close to passing then it may be worth continuing as stopping and starting again could end up costing more. Do they offer discounts on bulk bookings? ie 10 lessons for the price of 9? And, have you looked at the voucher sites to see if there are any discounts available via a voucher?

Also, don't underestimate the cost of petrol. If you will be using the car to commute every day, that will soon creep up and most likely exceed the cost of your bus ticket. Cars are great but they aren't cheap to run

Barclay Card @ £825ish - I will check whether I can pay off more with Barclay Card. As this £46.25 a month would be useful when the loan is gone.

The virgin credit card has increased because I did a balance transfer to clear my overdraft, this saved me £25/30 a month in OD charges. Which I'm using to pay off the virgin credit card. What's the interest on the balance transfer? 0%? Lower than the O/D I presume? If so, that's great. Well done!

I will look at posting a SOA, if only to format the data a bit nicer! The SOA is invaluable and helps you think about those annual, one off costs that come up. You should also be putting money aside for such things.

Thanks

I hope that helps.