The amazing shrinking debt!

dreamdreamer

A little bit about me:

I am 26, racked up nearly £16k of debt between the ages of 21 and 24 because of various things, but mostly my ex leaving me with a house I couldn't afford (and was tied into) and then losing my job and taking 10 months to find another in 2005 (was also suffering with severe depression so was beyond caring about my debt). There was also a bit of overspending! At one point my outgoings (before food etc) were £1200 and I had no job, so that was ALL going on credit cards and loans! It's amazing how much you can rack up in a year!

Happily I am on my way to recovering. Had a decently paid, stable job since 2006, found my wonderful OH (32) who is amazing with money, and whilst I won't let him pay back my debt for me he has been such an encouragement, and whenever I feel a bit down about it he'll give me the little treat I need (and can't afford!). He also paid the downpayment on our house this year from the sale of his old one (which his ex was living in!), and ironically the mortgage is less than our rent was on our flat so that's helped enormously.

When I started to repay everything 18mths ago my debt was as follows:

Lloyds Loan 1: £5000 @ 21%
Lloyds Loan 2: £4000 @ 17%
Vanquis Credit: £2000 @ 59.9% (!!)
Natwest Credit: £1100 @ 16.9%
Overdraft: £2200 @ 18.9%
Finance: £1500 @ 17%

Starting Debt: £15,800

As of 01/11/10:

Finance: £880 @ 17%
NBS Loan: £7500 @ 11%

Current Debt: £8380

I applied for a consolidation loan 18mths ago and was declined. So I started working a LOT of overtime and completely cut out luxuries. In 18mths I've paid the £5k loan and the £2k Vanquis Card as they were the highest APRs. The Finance will be paid off ASAP with more overtime. I reapplied for an NBS loan last month and was approved, now paying £300 a month for 29mths to clear the £4k loan, £2.2k overdraft and £1k C/C (+£300 left on other loan).

It's like a weight has been lifted. I can see the light at the end of the tunnel. My OH has started putting a bit away in savings so that we can have a decent holiday to celebrate my debt-free status. It's so important to me because we want to start a family and I wouldn't feel comfortable doing that with debt.

I'm getting there!! :j

Dreamer

dreamdreamer

Loving this consolidation loan. It's given me SUCH good motivation actually seeing my account in credit for the first time in 5 years! Paying off that overdraft is the best thing I've done so far! Now instead of wanting something, looking at my balance and going "meh, I'm already £2k in the red, whats another £50?" I think "Hmm, only got £150 in there, better not, need to buy the groceries twice more before pay day...". It's sooooo much easier to plan now!

Plus with all the debt in one place, any spare money each month just gets chucked on the loan as an overpayment instead of trying to work out where is best to pay it to and it winding up sinking into the black hole of interest on cards.

cushty1

Hi dreamdreamer
Well done for paying off so much, I have also recently turend from someone who thought already in debt so the £50 boots wouldn't make much difference, I used to think it helped me from feeling down but it def contributed to that. Now I will pay the extra off and am much happier!
Hope your debt free journey keeps up the good success!
cushty1

dreamdreamer

I know, I actually get a little swell of pleasure when I walk away from buying something now. And when I do buy something because I've got to the end of the month and have a surplus, I can enjoy it guilt-free! Much more satisfying!

dreamdreamer

Well, my first attempt at a cheaper food shop didn't go so well. I felt like I restricted myself so many times on the way round - got to the checkout - £145!! Although we hadn't been for nearly 3 weeks because I've been ill (and OH is incapable of shopping alone!) so we'd eaten literally everything in the house, and run out of all the "expensive" stuff like washing tablets, shampoo etc.

Also £25 went on alcohol :beer: because we're having people over tomorrow night instead of the usual "Go out, spent £60 on alcohol, £20 on taxis, and £50 on dinner". So in the grand scheme of things I've still probably saved £100!!

Two weeks until pay day today and £150 left in the current account. Won't be going shopping again before payday so I think I'm good! Also pulled 3 overtime shifts this week on my supposed days off so that's another £330 in pocket, although I won't see it for another 6 weeks! :mad:

All in all I'm feeling pretty positive. Got £300 overtime bonus in this coming paycheck so that should cover the inevitable xmas expenses... :xmassmile

chevalier

well done on tackling the debt. Glad the consolidation loan works for you, it doesn't for many. £145 for shopping doesn't sound too bad, IF you know how long it will last you! Did you meal plan first to get a list for the shopping? I found that this was a way of decreasing food spend more, and more importantly for me I wasn't throwing stuff out of the fridge that 'looked like a good buy' but that I didn't know what to eat it with. Money literally in the dustbin oops!

For next time you run out of shampoo, you might find you can get the same brand in a £ shop for much less.

dreamdreamer

I actually got an awesome deal on the shampoo - it has 50% extra free in the bottle and was buy 1 get 1 free... so I bought 6! :rotfl:But hey it'll save me buying it for a few months!

I didn't meal plan, but to be honest we're pretty dull and tend to eat the same 10 meals over and over so we don't throw much out, a bit of salad on the compost and maybe a quarter pint of milk sometimes. What we ARE guilty of is buying the bigger packs of things "because they're better value" - i.e. the family packs of mince/chicken etc, and then we just winding up eating twice as much as we should instead of keeping it for the next day. We really need to stop that for our waistlines as much as our wallets!

The consolidation loan does work for me purely because the APR is much better than any of my old debts, is a much shorter term, and forces me to pay a significant amount of my salary so that I can't fritter it and wind up paying minimum repayments/interest only. Genuinely curious as to why people seem so dead set against them. Lots of knowledgable people on here - I'm learning a lot!

Edited to add: This food shop had enough "meals" for 3 weeks - but we'll need another £20 of perishable in that period.

dreamdreamer

Well, payday again. Managed to keep afloat last month with £100 spare - thats gone into my new savings account. My new NBS loan allows 2 overpayments a year so I'll be transferring any excess each month into a savings account and then overpaying the loan with it every six months. I have created a spreadsheet and worked out that if I can save £100 a month this will mean paying my loan off 6 months earlier (new debt free date would be 23/09/2012) and saving a whopping £320 on interest (+ any interest made on the money in the savings account!).

Massive step this month: cancelled my overdraft facility. I cancelled my cards last month when I got the loan but was "edgy" about cancelling my overdraft as it leave me NO emergency fund. That was until my OH pointed out that he had credit available, and in fact some savings, so if the roof caved in he could pay!

Debt 23/11/10 = [STRIKE]£8380[/STRIKE] £8116

Edited to add: bought my ever-supportive OH a mountain bike for xmas today - the one he's been drooling over for the last 6 months. All done without using credit! So proud of myself for saving to get it for him and can't wait to see his face!

dreamdreamer

Right, that's all my xmas shopping done EXCEPT getting a 10"x8" photo developed for the mother (frame already purchased). With the exception of OH's bike (which I've saved for over 6mths and is also his bday present) spent the grand total of £171. Might still sound like a lot to some, but I have 9 people to buy for and previously spent around £600 each xmas, so big improvement. Most pleased with the brother's present, £2.99 on ebay (+ shipping) - a board game we were addicted to as kids and my dad threw away in a moment of madness. He has been trying to get hold of a replacement ever since and finally one popped up last week! He's going to be stoked, and all for £2.99... better get him a chocolate orange. :rotfl:

So... got paid on wednesday. All bills now out, £100 in savings account. £620 left in current account. Reckoning on £200 on food this month (xmas etc) and we have both our xmas parties. Mine is a pre-paid meal so should get away with £20 on alcohol and £10 cab (will get the bus in). The other is my OHs xmas do so he'll pay for the food , so that shouldn't go over £20 either. Other than that I'm allowing £100 of general cash for the month (coach tickets to see my parents just before xmas, stuff like that) and that SHOULD leave me £270 ish to stick into savings (and eventually overpay the loan, come april).

On a side note: we're only running 1 car now, we moved this year much closer to my work so my car is gone and I'm cycling to work. That was interesting in 3 inches of snow this morning! :snow_grin

dreamdreamer

I've created a spreadsheet to help me budget. So far this month it's gone like this:

Income £2110.33
Bills £902.51
Repayments £521.19
Spends £322.20

This leaves me £264.43 until the 21st (payday) and with one more grocery shop to do this should be easily doable!

My repayments are high this month (will normally be £295) as my loan only came in last month so i had overdraft interest, and £190 that I owed my mum to pay.

Spends includes xmas presents, groceries and any "entertainment". I'm quite impressed with my restraint! For example my total "spends" before I was a DFW were often £800-£900 a month.

Really looking forward to the 21st - got a BIG payslip coming thanks to 7 overtime shifts last month. That's gonna wipe out an extra £500 on the loan! :T

dreamdreamer

I used my debit card today and feeling guilty about it. Part of my new budget is to withdraw £50 a week "spending" money and if it runs out, it runs out. Well, I went into the city to do various bits (mostly to post off some wii games I've sold on Amazon) and had to pop in to buy a secret santa gift for work. Went to go to the ATM to withdraw this weeks money - and there was at LEAST ten people in the queue. I was already !!!!ed off having queued in the Post Office for 20 mins, and then in M&S for another 15mins to order the turkey. So I just thought "sod it" and paid on debit. :mad:

I'm annoyed cause I've done so well the last 2 months with only putting food shopping on the debit card. But the money was there and I have just earned £93 selling on Amazon so it's not a terrible fall back off the wagon - just a minor glitch!

On the plus side - 6 days until pay day and an unexpected overtime shift tomorrow.