How do you do it? Please help (SOA now included)

Luis

I am in a bit of a pickle at the moment. Having been debt free for years, all of a sudden I find myself in a bit of a mess, and getting stressed out about it. I have a couple of loan payments, the credit card is mounting up, the overdraft is accelerating away from me, the mortgage has gone up, the utility bills have increased - over the last 6 months I have lost control. I don't even know what I owe, and how much I pay per month.

So, I look on here, and see in people's signatures their figures re debt, and I don't understand how it is that they seem to start with big amounts, with debt free dates that seem so close? I reckon I must owe £10 - £12k (gulp), and the last loan isn't going to end until 2011.

How are you all sorting it out so quickly? How are you reducing your loans and interest rates? Please help, as I feel like I can't do it.

cattie1

i am the same i'm 24 with debt of 6000 and cant see me paying it off in full till i'm 30!:eek:
i think what they do is pay much more than their minimum payments when they can afford to
someone will be along soon no doubt to tell you how they manage this miracalous event!!!:rotfl:

Mirtos

Hi Luis. :wave: welcome. first of all take a deep breath. You're going to get through this, and one of the best things you could do is post on here - these forums are amazing, and have a wealth of information, with lots of people to offer help.The simple answer to us paying off our debts is that we throw everything we can at them (money wise, not rocks or anything ) until they go away!The first step is to post your SOA on here - see southern scousers sticky thread "first time posters" at the top of the debt free wannabe forum - it offers great advice on the first steps to take. People on here will then offer you the best advice we can on how to save/make money and where to cut back. It's also worth having a browse through the site and learning how to make yourself in to a more savvy consumer - how to get more for your money and hopefully save some along the way.I've been a DFW in earnest since may, and to pay off my debts I've been doing the following: 2 jobs, tutoring part time, making money through quidco, selling luxuries I don't *need* on ebay, selling books, videos and cds on amazon, and learning to freecycle rather than buying new. I've also become a devotee of the Old Style moneysaving board, and now EVERYTHING we eat is homemade which saves us tons, and I've got in to the habit of 'make do and mend' which is a big turn around from my old way of thinking.I'll have a think about what else, and add it as it ocurs to me. Hope that helps!

Mirtos

It's also worth keeping a spending diary to see where your money goes - those pennies here and there really add up!

overbudget

We have a high level of debt but also are lucky to have a high income - so by cutting our costs right down we can throw quite a bit at the debts - also know that in 18 months some commitments will end and we will be able to throw that as extra too. Hence the DFD is relatively soon (though 4 years still seems too long for me!).

I think really looking at outgoings and being aware of spending helps a lot - you can trim a lot of costs down - and every little helps towards bringing that date nearer. Also selling stuff on eBay/Amazon/car boot - all adds up.

lynzpower

Theres loads of ways of getting cracking with finding extra money to pay off the debts, its all possible through sheer effort and determination.

I have done things like
*bagged up coppers and taken them ( all £3!) to the bank to pay off my card
*did car boot sale and used the proceeds
*ebay/quidco/ mystery shopping
*grocery challenge, if I come in under budget the difference pays off my cards ( even if its only pence its worth doing)

And plenty more besides!!!

Luis

OK, here is my SOA.

Bills
Mortgage £470 (just gone up)
A&L loan £150.70 (ends Jul 2011 borrowed £7800 @ 6% I think )
2nd loan £130 (to mum, ends Sept 2008)
Council Tax £65
BT & internet £50
Electric £50 (no gas, just gone up as they forgot to take DD)
Car Ins & b'down £40.98
Orange £32 (variable, tied in til April)
B&C Insurance £15
Life Insurance £13.41
Union £12
Water £12
TV licence £13.48
subscription £2
Savings £100 (linked to current a/c from A&L til Jan '07)

TOTAL BILLS = £1157.57

PLUS

Barclaycard (Platinum 17.9%) £1100 and climbing. Try to pay £100 per month.

Catalogue, owe about £500, usually about £28 per month

so monthly spend up to £1285.57

Then diesel costs on top, easily £40 per week ( long commute) £160 per month

monthly spend now £1445.57

Smoking - about £150 per month (I know - easy to say give up, trust me I am genuinely trying)

monthly spend now £1595.57

Monthly Income £1600

So I do not have any money for food, cat and dog food, car tax, MOT, holidays, clothes etc. But of course I have to buy food, so I am getting more and more overdrawn. I have about £1400 overdraft (negligible charges thankfully), and the credit card is creeping up. I cannot see me ever clearing my loans.

I am fortunate in that I have just got a promotion, so in a few months, when the money comes through, I will be earning about £200 per month more, which should mean that ends will start to meet. But in the meantime, it is getting away from me.

Help.

themaccas

Hi Luis, I'm afraid there is no magic formula, it's painful hard work and requires commitment and focus. We have 2 good incomes and that certainly helps, if I was paying it off by myself I would find the debt repayments an uphill struggle. However, we are now well into our DFW mode and gradually we are finding that our good habits are becoming second nature. We have stopped spending and frittering money and account for every penny we spend even 40p on a pint of milk! If we run out of 'pocket money' during the week we don't go back to the cashpoint but wait until the weekend until our new weekly budget starts again. These are just 2 of the little things that we have done that have made a BIG difference in our attitude to money as well as our bank balance. Psychologically I have never looked beyond the current month we are in either, I personally have not found it helpful to think of 'a few months time I'll be better off because I'll not have that loan anymore' or 'my income will improve next month'. It just isn't helpful, you need to concentrate on the here and now - this month. We are not perfect and temptation is all around and I would love a holiday next year.....I can't guarantee I won't do something silly and book one either! Debt is an absolute pain the a@%*!!

CLAPTON

can you increase your income, is there room for a lodger or can you get a second job or overtime


there is no point in saving 100 per month when you are paying at least 17.9% on your CC.

what is the APR of the catalogue..usually these are very high.
and indeed what is the APR of the overdraft? if there is any spare cash make sure you pay it to the debt with the highest APR

smoking : switch to roll your own..not very elegent but cheaper

BT & internet : how much are you paying for the internet...there are lots at £15 or less...dont use BT for any calls use 3rd party suppliers like https://www.call1899.com or https://www.call18185.co.uk that only charge 3 per call (i.e. you can talk for an hour and only pay 3p)

plan all your meals and only shop with a list and make no impulse purchases. check out the cupboards and the freezer and try to eat whats there without buying anything new for a week or two.

obviously you can't afford new clothes or holidays at the moment.

cut the usage of your mobile.

Its reaaly important to add everything into the budget...if you spend it must be in the budget otherwise you can really address the issue of cutting back.

Toomuchdebt

I would definitely use the £100 savings to throw at the debt.

overbudget

OK - there may not be much slack in your budget - though as already mentioned you shouldn't be saving - it is costing you money - can you stop this? Cutting back the smoking even if giving up is too hard in one go - could you smoke a few less - even losing 1 in 5 will save you £30 a month - every extra one you can cut out is another £30. Check for local free NHS schemes to help you stop - that would make a huge difference to your disposable income. BT - even though I was still in contract I negotiated a new package - went from paying about £75 a month for phone and broadband to £45 which includes all landline UK calls and a fast broadband connection. Is worth checking their website to see if there is a package you could have with them cheaper and asking.

Ideally though you need extra income - do you have anything you can sell on eBay? Any books for Amazon? You can make some extra this way and that will help.

A careful budget, meal planning and a freezer will save you money on food - decide what you are going to eat for the week, write a list, stick to it. Set yourself a shopping limit and only take cash to that amount - it really focuses the mind when going round the supermarket!

Good luck