From £65,000 in Debt to £30,000 In Savings.......

kellyanne

Where do I start - like most people there was a ligthbulb moment. The lightbulb moment occured in 2006. Up to that point, me and my partner had happily been spending on cards, then we spilt up for a short period, took out loans of £10k each to 'clear' the debts together that we had built up and spent about 6 or 7 months apart. By the time we were back together, my partner had spiralled into using cards again that were originally cleared to nil with our loans. We also had these 2 loans now and both had cars on HP to fund. I am ashamed to say we never really tamed our lifestyle and continued to buy the latest designer fashions and holidayed wherever we pleased. We both had full time stable work that was well paid but we were only ever meeting minimum payments.

I began to realise the extent of the trouble we were in when we could no longer afford to pay minimum payments and meet the usual needs for the month, like food shopping, so we were always lagging behind with one card or another and then there were late charges, more interest and phonecalls. The moment I knew I had to do something was when I recieved a statement showing the minimum payment required as £656. I was in tears and did not see a way out at that point. I knew I couldnt take out any further credit, and we were being harassed so much I took to switching off the phone ringer...I then dreaded turning it back on, Saturdays, bank holidays - no day was sacred, and as much as I shouldve shared the seriousness of the problem with my partner, I choose to take on as much of the burden as I could myself. I tended to open all post and deal with the calls when they happened.

Well, I had a friend who encouraged me to go to a professional debt counsellor for advice and help. We made an appointment for a call from the Consumer Credit Counselling Service and got together all of the necessary paperwork. My partner was £52,000 in debt with cards and loans, and that wasnt accounting for the vehicle HP. My debts were more manageable but still stood at around £15-16K on cards and loans, plus i had an expensive HP agreement for my car. Seeing it all in black and white was mind blowing - we had nothing to show for it all - we didnt own our own home and had no real assets. But atleast it was a start. The process of getting settled on a Debt Management Plan was quite straight forward. Of course there were issues to iron out and calls and demands for the following few weeks and not all stopped interest accrueing immediately, but most creditors seemed happy to accept the offers made by the CCS and we eventually settled into a routine of payments.

Taking that first step was the hardest part. We had to make sooo many lifestyle adjustments and it is hard to live within your means when we had been so used to not having to, but since then in 2006, with the help of Martin and the Money Saving Expert Site, life has just got better and better. I will go on to explain how we have done it all, and how just learning to take advice and exploit opportunities has helped along the way. If this can help another person get motivated to sort out their situation or inspire someone to take the next step in becoming debt free.....then I am glad to tell my story.

mummum2

Wow, all that debt paid in such a short space of time and to have saved such a huge amount. I for one awaiting your story! Thanks in advance for sharing.

MM2

kellyanne

Sorry to ruin a fairytale but £65,000 to £30,000 was my challenge, not yet my acheivement, but we are not too far off now and think 2010 will be our year to achieve it and finally lay those demons to rest!

So....we are on the DMP and the first year goes by quietly, making payments but not really making a dent in the huge sum that stands between us and freedom. By chance in 2007 my sister mentions that she has written letters to the bank requesting her bank charges bank and they have been successful. She suggested that i gave it go and told em where to find the 'Statutory Interest Calculator'. So I log on to MSE site for the first time and discover a whole new world, that has helped to put my in the position that I am now. At that point I think I spent days scouring the site and learning. So my initial step was to gather my information from banks, cards and loans and send reclaiming letters off. I think the week we sent off our bank charges letters was the week they closed the doors on claims, but I have just sent an amended letter as I havent given up on that one yet...more about that later. Well, the Credit Card reclaiming of charges was very successful, some gave in immediately, others took another letter, but all gave us back a full or very reasonable proportion of the charges plus interest. Next was 2 separate claims for PPI, one with Barclays Bank, one with MBNA. Both went to the Ombudsman and both were eventually successful - MBNA was only settled about 8 weeks ago after the inital letters in 2007, but it shows perseverence pays off!!!! All in all that exercise wiped around £15,000 of our total, it just took time, patience and a few stamps.

I then set about boosting my income and saving wherever I could. We ebayed to the tune of about £3,000 over the last 3 years, car booted (the most successful reaped £300, and it was a 'free entry for booters'). I joined up for surveys (only adds a few pounds per month, but looking after the pennies and all that...) I traded in about 4 old mobiles that were lying around and gained about £150. I cancelled old subscriptions, reduced the sky package (and was offered free stuff for the next 6 months just to keep us on), and changed our mobile tariffs. The savings were declared in my partners next review with the CCCS and we were able to up the repayments to the creditors, thus reducing our time until we were debt free. I was so hooked by then, I was always looking for new ways to save. I used to shop almost daily and spend £15-20 a time in the supermarket - always picking up things I never really needed. Now it is strictly once a week (and I religiously get my points on my loyalty card) and meals for the week are loosely based around the fresh items that need to be used up and then I stock up on things with long sell by dates (jars,sauces, tins) when they are on offer. I also stock up on frozen items, as these will also last us longer and offer some range to my weekly meals. I also used my work Costco card to stock up at the warehouse on things like drinks and washing powders - it saves a fortune over a six month period. The changes to weekly shopping habits must save about £60 per week. I have also become 'voucher queen' I cut them out of papers and have an endless supply printed from the computer. I use them for special meals out mainly, which is something we love to do, but I now hate the thought of paying full price, when you can make so many savings. I am happy to take advanatge of money off coupons for supermarkets, and I hate going to the cinema on any other day that 2 for 1 Wednesdays. Our cinema even offers its 'Gold Class' seats on 2 for 1, so for a special film or occasion, we have no need to compromise. The other half stopped spending £100 a time on football trips, and I started to shop on ebay for essentials like work shoes - I have been amazed to 3 pairs from the high street (River Island, Faith and ASOS) for less than £20, a saving of atleast £130 on the RRP, (all new too!). Buying clothes was the same - switching from River Island to the Fabulous Primark for simply jersey tops and knits has saved a fortune!!!!! We no longer do silly things on Valentines and Christmas, we have a budget and my OH was most pleased with himself to have bagged one of my pressies for Christmas 09 for the sum of 1p from Ebay! Our recent savings include taking advantage of the current gold rush - we managed £850 for stuff that was sitting in a jewellery box of no real use or sentimental value. I also had a substantial rise at work and we reluctantly went down to one car. I paid off my HP in Janaury 2008 (my boss helped me out with my final balloon payment and I finished repaying him 7 months later in late 2008). In 2008 we also reluctantly went down to one car, but the savings we made where wonderful - our days just took a bit more planning with only one car to share. The savings allowed another increase in the payment on the DMP. This brings me onto now.....I will let you know where we are at today and the next lot of savings we hope to make in our quest........

BADPENNY_2

Love your story, very inspiring. Can't wait to read the next installment!

mummum2

Wow, me to can't wait to read the next installment. Keep posting

MM2

ruby1968_2

well done for achieving your challenge wish i could do that,just seem to go and down all the time.

sweetestthing

You are very inspiring, extremely well done

Needhelpsaving

Very catchhy title - will be reading with interest.

kellyanne

Thanks for the encouraging words, its nice to have a bit of support! Well as of today our debt stands at £21182.59, having got rid of the following debts in the past 3 years - Choice Catalogue, Student Loan, £10,000 BarclayLoan, Capital One Credit Card, Citi Credit Card, and Car HP (x2). We are now left with my partners debt (7 cards that is being managed on DMP with CCCS), and my own Barclaycard.

I havent stopped working towards getting rid of these debts once and for all - in the past 2 weeks I have rejoined the fight for my bank charges after being rejected in December due to the ruling. I was happy to see Martins templates go up a few weeks ago - just before my 8 week deadline, and I am awaiting responses now. Guess I will get the standard fob off again, but I am not one to give up easily. Total Requested £2541.02 - you'd think they would happily repay it considering there 100% increase in profits that they announced this week! Watch this space....

We are also in a position to offer full and final settlements as I have been saving in order to try to do this. The first letters went off last week and we have had 2 responses asking us to increase the offer. Now with hindsight I should have started at a lower figure and left room to negotiate. As it is I offered within 5% of our maximum and dont have too much room to manuorve now. Any advice on full and finals would be much appreciated!!!!!

Been eBaying too, my items finish Sunday (my OH is convinced most action occurs on a Sunday evening, so we try to get them Sunday to Sunday!). Already up to £46 for junk and unwanted bits - havent even had a sort out for ages. Started the 'Selaed Pot Challenge' too. I already had a 'penny jar' half full, so thats a nice start - was tempted to count it, but never, just sealed it. Will be nice to have a surprise come Christmas - I must say, Christmas is lovely when you dont have to go into further debt for it anymore!!! Anyway, back to now....I had a nice surprise in the post on Saturday - a £10 House of Fraser voucher for going paperless with my Barclaycard Statements - I had forgotten all about the incentive so that was nice - will put it towards something on one on my 'needs' lists. Also saved cash on Valentines - went out for dinner Tuesday instead of Sunday so we could use our offer voucher at the Chef and Brewer pubs - buy one main - get the cheapest free. It was lovely too - moneysaving doesnt need to kill off the romance!!!! I was also happy to hear that we can now go swimming for free even though we work full time - (other conditions applied regarding residential status) - a great bonus considering we are in training for the April Swimathon.

Up next will be a big sort out - I will eBay the best stuff and since the spring is (hopefully) coming soon, I will carboot the rest. I will also chase up full and finals and see if I can get any settlements. I love the sound of the challenge 'turn £100 in £10000'....my brain will be working overtime before I take the plunge though.

Any new ideas or additional help will be greatfully recieved. Will update soon...watch this space

MrsMoo2U

Just started reading this and am inspired but then it stops! Any updates?

djcomps

fantastic post Kellyanne. Keep us up to date with your progress.