Debt free and buy a house by 35

andymc29

Okay, here it goes......

my backstory...

Hi, I'm Andy, I'm 29, and through a number of years of being too generous lending money to friends and bying expensive things I really can't afford, I've landed myself with the following:
18k Personal loan with Bank1 - £390 per month
3.5k Personal loan with Bank2 - £155 per month
1600 on a credit card at 15% - £50 min payment per month

So just under £600 per month in debt payments coming out.

Right now, I'm living alone, paying £600 per month rent, have bills like every one else, mobile phone, cable TV, broadband, Council tax, utility bills, car tax, fuel, food, etc....

In a typical month, I've been making my payments, but still losing money and hitting zero on my account each month.

My goal now is to get out of debt as soon as possible, partly because it worries my girlfriend (who's very sensible, owns her own house and has no debts, I wish that was me!!!), and because I want to eventually buy my own house, so I'm actually paying off something real, not just stuff like personal loands for things I've got rid of long ago.

Paying off my debts will give me another £600 a month, that'd be like getting a ten grand a year pay rise!

I've just been accepted for a Barclaycard to transfer my credit card balance to 0% for a year for only a 2.5% fee, so I should be able to do that easily. Then get rid of the £3500 debt. Then spend the next two years, saving up as much as I can to get the big one paid off. Then I can start watching my savings shoot up and before I know it I'll be viewing houses and talking to mortgage advisors.

andymc29

I've realised my goal is basically to clear this off within 100 weeks.
Sound better when I look at it that way. Much more manageable than talking in years.
so 100 weeks or 700 days.

I know it takes a month minimum for your brain to adjust to changing spending habits, but I think I'm doing okay, I've got a long list of things I can do that cost nothing but still keep me busy and productive.

My main worry was that I'd become very voring by trying to save money all teh time, and that this could have a bad affect on my relationship with my girlfriend. But there's plenty of free or very cheap things we can do together that still allow me to save.

I figure I'll make a post every week for the next 100 weeks on this. I do get annual bonuses at work which will be going on paying off debts, so with the first one coming up at the end of February, that should be a good post.

Hopefully m next post from today will be me transferring my c.card balance to my new barclay card which according to the website at least, I've been accepted for, so now I'm just waiting on the postie.

jacey98

hi just wanted to say welcome on the road to clearing the debt, you sound like you have it all sorted in your head which is the main thing as that def needs to happen first.

i am now the queen of finding cheap and free things to do with my oh there are loads of really good sites with discounts and vouchers and things so boring will never come into it.

good luck will pop back

jc

andymc29

I got my barclaycard, and have now transferred my 1600 balance from my hsbc card over. There was a fee of about £40 to transfer across, but it's going to be at least 3 months before I can clear this, so I save some interest there at least.

I still don't know what my February bonus will be, but am hoping this will cover my existing Nationwide loan.

One thought is that noationwide may contact me to take out another loan when I settle my existing one, if this happens then they may offer me a much better rate than I currently have with natwest. This may then make it worthwhile to switch my natwest balance to nationwide in order to save on interest in the long run and pay it off quicker.

clearing_out_my_pockets

Hi - just to let you know that when you come through the other end it will feel so good. 18 months ago I got engaged and between my OH & I, we had £15,700 of debt to be cleared before we could even think about buying a house / getting married. Through serious budgetting and shifting money around, we've shaved six months off OH's loan and are waiting to hear back from the mortgage company (hopefully with a formal offer).

Have you done an SOA to see where you can make small changes?

kavics17

Hi,
100 weeks is not far ahead! I know how it is to have a very sensible OH, my fiance is the most disciplined man in the whole world! Because of him I bought my own flat at the age of 26 (I felt I was pushed into it, was so afraid of the financial commitment but he basically bullied me into it-today I am so grateful for that!), and now saving like mad to buy our family house (hopefully next year). Try to have a spending diary, and try to overpay your loan every month, you will see how the interest will come down. I have a Lloyds loan which I used to buy a garage for my flat and have been paying a £286 month (including a £100 overpayment)-my aim is to pay it back before July next year!
Good luck! MSE is addictive...:rotfl:

andymc29

Just a quick update, my barclaycard is now frozen in a mug of water in my freezer.
So I've got it in emergencies but not easily to hand for impulse spending. ;-)
My only concern now is whether freezing it in water will break it?

andymc29

oh, forgot to mention. I've managed to only spend £50 on food this month. It's helped a lot that my work has been buying my lunches for the whole month, but still, I'm happy with that. I think with some creative recipes though I could get it down further.

with food, even little things help, like using half milk / half water when making porridge. Or freezing my bread so it doesn't go off.

It's not tesco value beans on toast every day though. I'm still eating quality food, just less meat and cheeses, and otehr things that cost high prices.

It's more about how many calories you get for your pound. My target is 1000 calories a quid. That way you can live on a few pounds a day. factor into that my work buying some of my lunches (and occasionally all my food when I go away) and I should get by on less than £50 per month.

andymc29

thought I'd write a few of the stupid things I've done in the last year that haven't really helped me sorting my debts out:

I got a big bonus at work in February, instead of paying off my personal loan and credit card, I spent £2000 on a holiday to Japan, £800 on a new laptop

My TV broke, and even though it's under warrenty so can get repaired, I decided to get it repaired later and went out and spent £370 on a new TV instead.

I moved into a new flat in June, one of the first things I bought was a £155 coffee machine for my kitchen, it's probably only been used once a month since then.:o

I'm renting a one bedroom flat for £600 per month, when I could have rented a room in ahsared house for £350, along with bills, I would have saved £300 per month by living in a shared house. :eek:

I only live 1.5 miles from work, but on occasion if I'm feeling lazy, I drive to work, meaning I'm wasting money on petrol when I could cycle it in ten minutes.

I have a habit of going to Tesco's at lunch times and spending £5 on my lunch, sometimes for weeks at a time, this can mean up to £80 per month spent on lunch when I could have spent £15 on packed lunches instead. this has probably cost me hundreds over the last year. :eek:

Instead of waking to my local supermarket (15 minutes), I often drive 10 miles to one instead. Making it a 20 mile round trip costing me about £3 in fuel, I could have had home delivery for that! :mad:

I also buy quite a few gadgets when I'm bored and feel like spending money I don't have. For example, I was working Canada earlier this year and as soon as I found out I was getting a pay rise, I went out and spent £200 on an ipod touch. Only to sell it a month later to get an iphone on an expensive £35 a month contract, which I now locked in with for the next 2 years! :eek:


I need to change all these habits, this is my plan, this is my goal, and I will achieve it.

starnac

we've all done stupid things like that so don't worry about the past too much. as long as you realise that being debt free is your main goal at the moment and spend your feb bonus wisely.

good luck in your journey though

angelizz

andymc29 wrote: »

thought I'd write a few of the stupid things I've done in the last year that haven't really helped me sorting my debts out:

I got a big bonus at work in February, instead of paying off my personal loan and credit card, I spent £2000 on a holiday to Japan, £800 on a new laptop

My TV broke, and even though it's under warrenty so can get repaired, I decided to get it repaired later and went out and spent £370 on a new TV instead.

I moved into a new flat in June, one of the first things I bought was a £155 coffee machine for my kitchen, it's probably only been used once a month since then.:o

I'm renting a one bedroom flat for £600 per month, when I could have rented a room in ahsared house for £350, along with bills, I would have saved £300 per month by living in a shared house. :eek:

I only live 1.5 miles from work, but on occasion if I'm feeling lazy, I drive to work, meaning I'm wasting money on petrol when I could cycle it in ten minutes.

I have a habit of going to Tesco's at lunch times and spending £5 on my lunch, sometimes for weeks at a time, this can mean up to £80 per month spent on lunch when I could have spent £15 on packed lunches instead. this has probably cost me hundreds over the last year. :eek:

Instead of waking to my local supermarket (15 minutes), I often drive 10 miles to one instead. Making it a 20 mile round trip costing me about £3 in fuel, I could have had home delivery for that! :mad:

I also buy quite a few gadgets when I'm bored and feel like spending money I don't have. For example, I was working Canada earlier this year and as soon as I found out I was getting a pay rise, I went out and spent £200 on an ipod touch. Only to sell it a month later to get an iphone on an expensive 335 a month contract, which I now locked in with for the next 2 years! :eek:


I need to change all these habits, this is my plan, this is my goal, and I will achieve it.

The first step is reading sites like this and working out how to move forward. Ultimately we all want the 'nice' things in life, and there is nothing wrong with the odd treat (life would be dull without them), but it's about being able to enjoy these treats - and that for me only comes when you feel like you can afford them

Good luck :beer: