always in debt

Ames

Are you really only spending £40 a month on entertainment? That's less than £10 a week. If you're underestimating things like that then your debt is likely to just go in increasing.

brokemedic

I didn't go out for about 6 weeks due to exams and revision and then I spent most of August working so it's probably right at the moment. I was aiming to stick with that amount for the next couple of months whilst trying to get to grips with the debt and then maybe increasing it.

Tixy

To join in the challenges - some are ongoing so you can simply pop in anytime and say you'd like to join -its quite a good way to get to 'meet' people on the boards who can support you, and all have friendly people on them. Other challenges run monthly or even weekly, as we are near the beginning on the month you could still join in with September's.


Here is a link to the main challenge post -
http://forums.moneysavingexpert.com/showthread.html?t=767513 (some of the links are for August but Septembers will be about by now - some will have the link to September on the last page of August's I think).
Have a look to see what might suit you best, from what you have said maybe the No Spend Day (NSD) challenge would suit you. This is where you set a target number of days to not spend any money in the month, eg of the 30days in september, set yourself a challenge of spending nothing for 18 days in total. This helps limit incidental spends and helps you organise your spending better in advance.

brokemedic

Thanks for that.

I quite like the sound of a no spend day. will definitely try and get myself on that challenge.

brokemedic

Can I ask for some more advice please?

I am due to receive the first instalment of my student loan in the next couple of weeks - about £1800. My initial thoughts were that I would just put it into a savings account as I have no savings especially when it comes to one-off bills.

But now I am wondering if I should just use the whole amount to pay off my debt? Would that make more sense? Or am I just using Peter to pay off Paul?? Does that make sense?

I would be grateful for any suggestions.;)

brokemedic

Ames

As long as you'd have enough money to live on without the loan, I'd use it to pay off your debts.

Fortheloveofmoney

If you find that you slip back every couple of months then maybe your budget isn't realistic. I gave myself a generous (compared to most on here) allowance every month whilst on my debt free journey as I didn't want life to be too miserable. Yes it delayed my debt free date a little but I didn't go over budget once in the whole 2 years I was paying off my £30K debt.

It really worked for me. I always find if I'm too strict with myself on anything in life, I never achieve what I want to. If, however, I take baby steps, they soon gain pace and I get there. If any of that makes sense.

Jesthar

brokemedic wrote: »

Can I ask for some more advice please?

I am due to receive the first instalment of my student loan in the next couple of weeks - about £1800. My initial thoughts were that I would just put it into a savings account as I have no savings especially when it comes to one-off bills.

But now I am wondering if I should just use the whole amount to pay off my debt? Would that make more sense? Or am I just using Peter to pay off Paul?? Does that make sense?

Hi medic,

My brother and his wife are both doctors (graduated a few yars ago), so I understand where you are coming from, especially with the placements!

Regarding your loan, I'd say split it 50:50 if you can afford to? If you paid off the House of Fraser, Next card and the lower MBNA card, that would free you up an extra £36 a month, and leave you with over £1,100 left - cut up those cards, too, if you haven't already! You could then either pay a bit more off your highest APR credit card, or leave all the rest knocking over £1,000 off your overdraft, which would save you a bundler of intrest either way!

Oh, and start yourself a spending diary, it's crucial for working out where the pennies all slip away.

~Jes

brokemedic

Thank-you Ames..

FTLOM - if it's not too nosey can I ask how you managed to pay off such a huge amount in such a short space of time.. That is inspirational and good to now it can be done as well. How generous was your allowance? TBH I am not sure how to go about the "treats" section. If I give myself too much, is that money that could potentially have paid off my debt that little bit quicker?

It's only since I have started this that I have begun to reflect upon the way I spend money. I don't really think "Do I need this?" - I think I just buy it without thinking whether I can really afford it.

You really have to change your whole mentality to money but how do you guys make it stick.. I really don't want to follow my old pattern anymore.

:rolleyes:

Fortheloveofmoney

brokemedic wrote: »

Thank-you Ames..

FTLOM - if it's not too nosey can I ask how you managed to pay off such a huge amount in such a short space of time.. That is inspirational and good to now it can be done as well. How generous was your allowance? TBH I am not sure how to go about the "treats" section. If I give myself too much, is that money that could potentially have paid off my debt that little bit quicker?

It's only since I have started this that I have begun to reflect upon the way I spend money. I don't really think "Do I need this?" - I think I just buy it without thinking whether I can really afford it.

You really have to change your whole mentality to money but how do you guys make it stick.. I really don't want to follow my old pattern anymore.

:rolleyes:

Nope not nosy at all. It's a long story.......here goes.....

I originally had an overdraft, 2 credit cards maxed out and a previous consolidation loan. The loan was for £18,000 so this was most of the £30,000.

I consolidated the first £9,000 onto my mortgage (i know ) and would not recommend this to anyone without careful calculation and serious consideration. I don't think I'd do this is the current climate but times were different in 2006. This was used to pay off 1 of the cards.

This gave me some breathing room, freed up some income and stopped loads of bank charges.

Most of the debt was the big loan so I just ignored this one and just kept paying the fixed monthly repayment (£428.77).

I then slowly began to make inroads by not over spending and paying more than the minimum payments on the CC. Switched the card to 0% as soon as I could and carried on paying.

I received an annual bonus of around 8% so this took a lump of the OD which in turn allowed me to open an A&L account (0% OD). I couldn't do this previously as I was never in credit in my other current account.

After doing this for a while, I realised I still hadn't budgeted properly so i sat down and did a SOA and realised what I could cut out/reduce to throw more money at the debt.

My original DFD was somewhere around September 2009 and i finally became debt free in April 08.

Oh and I also moved in with my boyfriend (now hubby) so my household costs have halved. So that was a big help too.

Sorry what a ramble! But as you can see lots of changes made a big difference to the overall debt.

I have since gone on to overpay the mortgage and got rid of the 9K I put on plus the additional interest paid.

At the time of my journey I never posted my SOA as I knew I would get comments about my allowance but I also knew it was the only way for me to do it. My treats budget was as follows:

£50 going out
£61 spends
£50 for clothes
£26 for hair cuts

So a massive total of £187 per month. This was about 7.5% of my take home pay. This amount was comfortable for me.