Determined to detox alot of my debt in 2010!

PinkButterfly_2

I can't do this for ever - as I have no one chasing me, I feel as though I have it under control. But it is a neverending road. Will do a list of all my debts this evening - I have only been able to manage it better since I transferred some of my credit card debt to cards with lower rates - makes such a difference!! I did have a problem getting a new card which caused a massive today together with massive amounts of internets (Damn you Marbles Card!!).

After my first wish, which is that I wish I never discovered credit cards, is my second wish, which is to massively pay as much as I can this year. I do also want a little car though as I live in an area with hardly any transport- I know this includes abit of an "if and but" but sometimes travelling out by train costs more expensive! This is what bothered me in the last few months - had saved for a car but then put the little lump sum away towards the debt. A family holiday last year did not help things (presents galore - thankfully the sales helped me keep the costs as low as I could!)

Life is so depressing sometimes. But at least I have a job which actually pays more than average, just need to arrange my debt paying off more effectively. Should have done this ages ago! There was a time a couple of years ago where I was putting alot more than the min payment away but the interest rates killed any hopes of getting anywhere.

Will be looking at the forums for much needed advice and tips!

One way I have been doing is paying minimum payments on the lowest interest card and then try and save up the balance within the promotional period - felt great when I did that with my HSBC. Just transferred another balance over so I have the same aim!

I am going to try and not spend on extras next month and put all the extra towards my debt!

Already have a two sealled tins which I am filling up - one for coppers and small silver and the other for £2 and big silver! I had another sealed pot for 2 years which I opened just before Xmas - had nearly £500!! Definitely worth it!

Fun evening to look forward to...

Here is the beginning....wish me good luck!! And I wish you all the same too.

savingmummy

You will be fine. It sounds as if your ready to change.
I have never had a cc so can`t advise regarding those, but i would chop them up lol!
Make sure you do a SOA 100% accurate, including ALL incomings and ALL outgoings. Also include Apr`s this helps to know what needs priority.

Good luck with becoming debtfree x

Tixy

Good luck

Sounds like you have a plan in place and doing a detailed budget and list of debts is a good start.. It can take some time to prepare but really helps you see where you are at the moment.
If you then use the snowballing calculator you can work out how long it will take to get debt free at the current rate you are paying (and how long to save up for a car).

If you post your results on here people will try to help and advise.

jillybobs

I've also decided this year is my year to finally sort our finances out. It just seems to have hit me that its pointless buying things on the credit card because you do have to eventually pay for them. I've been down the route of getting a loan to consolidate my cards then not paying them off and spending the loan. I'm going to concentrate on paying my credit card and store card off this year then next year it will be the loan. Good luck PinkButterfly

PinkButterfly_2

Really annoyed as I just spend an hour writing my long depressing post and it disappeared when I went to submit it! GRR!!

Thanks for all your support guys - really appreciate it and really need it. Just had a full blown reality check with my debt and it is nearer to £30K. A deposit for a house!! I would cry but am going to have to be methodical about it and think of ways moving forward. Will put another post up soon detailing it all.

Hoping that keeping this blog will help me on this determined journey instead of keeping post in notes everywhere and keeping notes in different books. Please let me keep myself on track!

PinkButterfly_2

Okay - just a mini background. Got married some four years ago - but hubby and I keep separate accounts and our finances separately. We also live with extended family but he pays the mortgage. I don't have any bill related expenses towards the house I live in. Oh and we have no kids of our own yet - and I guess this is an extra reason why I am on my mission this year - I don't want this debt with babies!! I should have started this mission ages ago. Please note, my intentions were always there but just interest rates and blindness didn't let me go far.

For example, I transferred £2K into a Marbles card 3 years ago - a year was interest free. Then suddenly a wake up call makes me realise that the interest rate was suddenly really high and near the end, was nearly 38% (I think I quit that card just before the new interest rate started) and my balance was only down to £1600! So I transferred to a low balance card 6 months ago and have now paid it off. The interest sums really took away any benefit of me thinking I was paying over the minimum payment and making a different in a positive way. I was just paying before w/o alleviating any of my debt!

Hubby has let me transfer over some balances on to his cards which I keep control over - i.e. standing orders etc.

Issue of getting a car. Hubby did suggest we would get a car but now I think I have to deal with it on my own! In my area I need a car to get around, when I was in London, transport and my season ticket worked fine. I hate relying on other people. When we go out, we do take my father in law’s car which (1) guzzles down a lot of petrol and (2) has not been offered for me to use!. I just need something to get me to my parent’s house and just to give me abit of freedom. But I don’t want to buy one til I have enough money for insurance, road tax, full tank of petrol! I have been mindful of car –v- debt and that is why I paid of £1600 off one card and just thought I would start “saving again”. But my “savings” are for bulk payments of my debts as I find this works out better (am I deluded) and some for my car!

Was an idea but: Hubby remortgaged last year but he only told me after he done it – I told him it would have been an idea to amalgamate our debts and put on the mortgage then I could pay him towards the mortgage every month, which I thought would have alleviated a lot of stress for both of us! Unfortunately, this was all an afterthought and his next remortgage won’t take place for another couple of year.

I don't have a mortgage to pay BUT I do help family members with a standing order of £300 a month - as they no longer work full time (my parents!). I also help out with the groceries big shop every now and again - hubby and I sort of take this in turns to pay which can easily hit £100 without thinking about it! I would say I take care of the birthday presents in the family and recently had a family wedding where a bit more cash was given away! Still can't get over that I have so much debt without having a house nor a car to show for this. Anyways this could be like a big waffle, so let me get my breakdown of my debt out first:

Outstanding Debt:

1. Loan
Remaining balance: £11,419.84
APR 6.4%. Ends in August 2013
Monthly Payment: £294.28
Note: Can overpay with no fee which will reduce interest rate and term

2. Credit Card
Remaining Balance: £9,061.88
Lifelong balance: 8.9% I think!
Monthly Payment:£50
Interest incurred last month was £60.66!
REALITY CHECK: Did not think the interest would be so high on this one. Had planned to pay minimum on this until I have cleared the other cards. Think the interest rate is higher on this.


3.Credit Card.
Remaining balance: 2,882.63
Lifelong balance rate of 5.9% (need to double check, either 5.9 or 5.6!)
Monthly Payment:£65
Min payment: £57.65
Interest: £14.02
Need to reassess?


4. Credit Card:
Balance recently transferred: £2,200
3.9% for 6 months with fee (around £50)
Monthly Payment:Will pay £60 – £70
Minimum Payment for balance of £1600 qwas around £40 with interest of around £6.
The plan was to pay MP and put money aside in savings and then pay the balance within the 6 month period, if not earlier. Will be making an additional payment of £200 + this month


5. Overdraft:
(a) usually £1700 at of every month (!!)
(b) Student Account still has £1200.
(a) was charged around £30 for interest last month!

POOP


TOTAL DEBT: £28,263.51

MONTHLY PAYMENTS: £479.28

<BIGGEST SIGH EVER>


WAGES
After season ticket deductions and before any overtime calculations –
£1,763.93 per month
OMG the tax man is such a thief!!


FIXED OUTGOINGS

Debt Payments
£479,28

Family
£300.

Mobile Phone
£30

Savings
£250
If not in my account, then don’t spend it and also keep it for bulk payments/car


FIXED OUTGOINGS SHOULD BE AT: £1049,28
_____________________

TOTAL MONEY LEFT: £964.65 (REALLY?)
Note: Where is it all going?? Spending Diary Needed!
Other Outgoings last month totally at: £622.

NOTE: Need to keep a spending diary! Plan is to be really tight next month and see where my money goes. This is the problem with being in a big family....

BAD HABIT: As my current account overdraft limit is £2K - if when it comes to payday my balance is -£1789, I will put £211 away in savings as part of the bulk plan.

SAVINGS

My current savings are: recently paid off £1600 on one of my cards and hence the recent transfer as they had a new promotional rate.

Instant Savings
£1200

Cash ISA
£635
This money came from my sealed moneypot and cashback sites!


Car –v- debt!


PLANS FOR ACTION for one month

· Spending diary

· Bring lunch in from home.

· Re-assess debt payments

· Hopefully this should shed light on where my other outgoings are going!


ADVICE PLEASE;
· Particularly on how to deal with my credit card debt the best way possible. I have Applied for 2 credit cards in the past without success and am mindful of applying again! How much should I pay on each card.

· Can I do and in how long?

· Who has successfully come out of this situation and what did you do?

· Anyone selling a good car for around £700?

Tixy

Have you plugged all the figures into the snowball calculator? I would do this. I also really would pay off some of the debts with your savings, or at the least stop savings and start making more inroads into the debts. At the rates you are paying off the cards you'll be paying them for decades.

Are you saying you are going to take your overdraft up to its limit to put money into savings? really? your overdraft is quite possibly the highest APR of all the ones you have listed, and you want to save it and earn a tiny interest rate.

The snowball calculator will show how much extra you will pay in interest if you don't pay things off in the most efficent manner. And it will work out how long it will take you to become debt free.

A spending diary is a definite must to track down all that missign money, as your living costs are so low you should be able to make much higher inroads into your debts.

Double check the rate on card 2 and the minimum amount. The minimum payments looks to be only 0.5% of the balance - put the figures for that into the minimum repayment calculator and see how long it would take to pay off (it will take over 100years to clear if you only pay the minimum amount). http://www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc Play around with the figures on this and see what a difference it can make to up your payments slightly (eg pay 2% of the balance brings it down to 28years).

You'l get there, you just need to rethink the approach. Sorry no car for sale!!

Good luck.

PinkButterfly_2

Many thanks for your advice - are you able to post a link for the snowballing calculator? I found the MP calculator which scared me abit but I am paying more than MP all cards save one.

I just don't know how to approach it - should I deal with one card by one or all in one go? As when I was paying significantly on all the cards, it made no dent yet. But then for example, with a card with promotional rate of 3.9%, I paid MP, and then saved up to pay that card in full at the end of the term. When I was paying MP on that card, I also re-juggled how much I was paying on the other cards.

I am not sure how much to pay on each card to make a difference.

Most of my spending is ad-hoc expenditure. We have a big family and my husband just started a new job recently too so I took over petrol/shopping expenses for two months which added up plus we had a family wedding and were expected to spend loads there for presents (tradition and all of that!). But definitely keeping a spending diary from next month - have to! I always start off but never carry on - but have a small notepad that I can carry with me.

katsu

To save most money pay off highest interest rate debt first.

Don't save money, pay it off your debts thus reducing the interest they charge you.

BILLIE

Pink Butterfly you have made me laugh - :rotfl: I know it is a serious situation but you have tackled it with humour. I keep having light bulb moments and keep saying I am going to actually post an SOA on here but never actually do it, but I have tracked all my debts and am trying very hard. One of the things I have tried to do is that when a debt becomes low enough I try splitting into say 4 payments. For example if you use your saving to pay off the lowest card, the remainder will probably be low enough to pay of in one swoop the following month. You are very lucky that you do not appear to have payments usch as gas/electric/Council tax - if I didn't have household bills it would be so easy. DH has been outof work since Sept 2008 and Government think because I work that should be sufficient!! Ha Ha Anyway good luck keep it up and I hope to hear that you are doing well.

Tixy

There are a couple

http://www.makesenseofcards.com/snowcalc.html


http://www.whatsthecost.com/snowball.aspx