update from me

Tondella · 27 March 2006 at 1:58PM

Hi DFW-ers

I started on here last August although it took me a while to get my debt free plans in action. For those who don't know, my OH and I got engaged last year and decided that we would tackle his credit card debts as they were an obstacle to our future together.

We looked at our budget, made reductions by deciding on food budget, clothing and entertainment allowances. Cut back on eating out, dropped all unnecessary expenditure (sky package for MIL, TV rental etc) and followed the credit card shuffle to get our debt APRs down from an average of 15.9% to a maximum of 6.9% and then snowballed our repayments.

Here's what's been happening lately.
1) paid off first credit card! what a feeling
2) paid off OH's overdraft
3) overpaid all but final payment of OH's original consolidation loan. This was a mini epic - we have actually not paid it off but transferred it to my Egg card during the 0% anniversary offer. I had to beg Egg to extend my credit limit to cover the loan after an initial refusal. Then Lloyds wouldn't accept the balance transfer so we had to transfer the money into my current account and go into branch to make the payment to lloyds by cheque. However it now means that a 10.9% loan is on 0% for the next four months, during which time we will be targeting all our overpayments. Lowering the APR and adding it to our snowballing plan has made a huge difference to our debt free date.
4) finally decided to open Alliance and Leicester account. This was a big decision as I have become accustomed to HSBC. I have decided to use the A+L account to hold the money allocated to credit card repayments every month. This means my wage still gets paid into HSBC, A+L gets fed by standing order. We will earn 5% interest on the repayment money AND I got money back from quidco for opening the account. Which leads me to....
5) joined quidco. I can't remember who posted on the debt free board singing the praises of quidco but they finally got me to have a look at it and i love the site! I got 9% back on the underwear I bought for my wedding (instead of having the dressmaker lady buy me one, which is what she originally offered) and £50 for opening my A+L account. I don't often make purchases now but I will be checking to see whether i can get cashback from this excellent site.

Unfortunately my signature hasn't gone down quite as much as all this effort would suggest. That is because i am including the spending for our forthcoming wedding in with the debts we are repaying. After some long and hard soul searching and alot of parental help the final cost of our wedding is looking like £4k. It does still sound like a lot however it translates to an extra three months of repayments, which we can live with. Perhaps not waiting until we are truly debt free is a sign of what got us into debt in the first place however the emotional and financial (we get many benefits being a married couple - accomodation, travel assistance etc) pros outweighed the cons of the extra payments.

It all came home to me this weekend when reading the Times money makeover section. A couple of public sector workers were expecting their first child, wanting to have their mortgages cleared by the time the child was in uni, but looking at an increase in expenditure associated with having a child and managing £19k of credit card debts. My ultimate aim in tackling our debts now while we are relatively responsibility free is so we can look to starting a family with no financial burdens, in a strong position to be tackling our mortgage. That couple could well have been us if we hadn't taken these steps.

I hope that this summary has given those of you starting on your own debt free path some inspiration and thought. I'd appreciate your comments and feel free to ask any questions.

Tondella!

BACKFRMTHEEDGE · 27 March 2006 at 2:03PM

Congratulations :j :j :j :beer: :beer: :beer: :T :T :T :money:

lynzpower · 27 March 2006 at 2:05PM

Fantastic news tondella! Im in a very similar situation to you at the start, and with the same priorities!

Congrats!

moozie_2 · 27 March 2006 at 2:08PM

You are doing really well! What a lovely post to read, very inspirational!

Stay focused and you'll be there before you know it! :T

JAMIEDODGER · 27 March 2006 at 2:14PM

you are doing so well hun......keep up the good work and im sure your wedding will be beautiful and well worth all the effort!!!

dinkylou · 27 March 2006 at 2:21PM

Well done Tondella.

You've done so well between the two of you, and I know that it wasnt easy at first getting OH to spend less as well.

Looking at your sig and how quickly you are getting your debt down makes me feel that I should push harder to get rid of mine.

Keep going, you re doing great and inspiring the rest of us.

Ronankfan · 27 March 2006 at 2:24PM

Well done and keep it up

bluezone · 27 March 2006 at 2:34PM

fantastic news - keep it going!

Montymoo_2 · 27 March 2006 at 2:41PM

Well done!!! its nice to know are people are getting closer to achieving their goals

bigdec · 27 March 2006 at 2:48PM

well done its a great feeling knowing that you have got it all sorted

snoozer · 27 March 2006 at 2:55PM

I think the fact that you have managed to keep your wedding costs down to 4k is an achievement in itself, almost everyone I know spends around 10k - well done to you.