The amazing shrinking debt!

dreamdreamer

ARGH this debt paying game is hard! I was just on ebay taking a look at iphone 3GS (not iphone 4's as you can't put a normal sim in them and get a decent sim-only deal) and was THIS close to bidding on a mint iphone 3GS for £245. Bargain! My blackberry is slowly on the way out with a year left on contract so I'm going to need another phone at some point and don't want to renew this contract as I hate being tied in for 2 years at a time so I was going to buy a phone at the end of the year outright (after debts are paid off) and then get a cheap sim-only deal.

That was so cheap. My finger kept hovering over the bid button but I get telling myself that's a whole month of loan repayment, a whole more month in debt. But it still felt crap when it went for £245 to somebody else. I can't remember the last time I bought something that I really wanted. Sigh. I'm trying to tell myself I can buy one in September when all the debt is paid, or maybe even persuade OH to buy one for my bday in August, but it seems so far away!

Cliff1805

I cant remember the last time I had no debts. I no longer have any credit cards but I have four loans totalling over £19,000. I am ashamed because I have a decent job paying a good wage and I have nothing to show for it apart from debt. I am coming up to 50 soon. If I keep up the repayments on the loans I will be debt free by Jan 2014. The first loan will be paid off in October this year so if I used the £250 payment to overpay on the other loans then I could pay it off even more quickly. I know I am going against all the advice but I would like to carry on paying the normal amount and then try and get a bit of savings together with the £250 released from the first loan because I simply dont want to have a credit card ever again. I find stories like yours inspring and they help me to keep motivated. Hopefully I can get there too!

saorsie

Hi dreamer ~ just read through your diary and you have done soooo well :T Like Cliff says, you are an inspiration!

dreamdreamer wrote: »

ARGH this debt paying game is hard! I was just on ebay taking a look at iphone 3GS (not iphone 4's as you can't put a normal sim in them and get a decent sim-only deal) and was THIS close to bidding on a mint iphone 3GS for £245. Bargain! My blackberry is slowly on the way out with a year left on contract so I'm going to need another phone at some point and don't want to renew this contract as I hate being tied in for 2 years at a time so I was going to buy a phone at the end of the year outright (after debts are paid off) and then get a cheap sim-only deal.

Now this is very interesting indeed ~ I have a bit of a yearning for an iphone myself but have a sim-only contract with orange at the mo and that's the way it's staying! I only really want it for calls and messaging and to store music and photos but was put off as was advised that it was a different sim card. Is that only for an iphone 4 then and would the 3GS support my piddly sim-only service. I am embarrassed to share that it only costs me £7.50 per month so as you can imaging I'm reluctant to increase it but I am only human and I want an iphone!!


-s-

dreamdreamer

If a savings buffer makes you feel more secure than I say go for it, advice is only good advice if it works for you. It'd only take a few months of that £250 extra after October to build up a bit of an emergency fund and then you could start putting it toward the second loan as an overpayment.

saorsie - as I understand, and I am FAR from being an expert - the iphone 4 has a micro-sim and the iphone 3GS a normal sim, any normal sim will work in it. You'll want to add unlimited data to it though (most networks do it as a "bolt-on" for £5-£7.50) or it'll cost you a fortune if you use the net. You also won't get a few of the features, like the weirdo iphone visual voicemail thing. But I don't really care about that! If all you want it for is calls and messaging I don't see why it wouldn't work on your £7.50 sim! Just be sure to turn all the connections off!

I'm with T-Mobile at the moment who I want to stick with because only they and Vodafone have any coverage where I live. With a sim-only from T-Mobile I can get 600mins, 500 texts and unlimited internet for £15. Which is £20 less than I pay now for the same usage allowance! Although if Vodafone are still doing the £120 cashback on sim-only when I switch at the end of the year I'll consider switching over.

Here's an article about it: http://crave.cnet.co.uk/mobiles/iphone-3g-s-the-secret-one-month-contract-49302556/

Edited to add - you can tell I've been on MSE too long when I feel a little bit shallow inside for wanting an iphone!

dreamdreamer

I just thought I'd share a bit about my LBM since I've never added it to this diary;

My ex had left me in 2005 in a house I couldn't afford and was tied into a contract with, I'd lost my job a couple of months after through redundancy, and had no savings. Bills were being paid on credit cards, and those were being consolidated into loans, and the cycle would start again, and my outgoings were increasing because of all the debt. My outgoings were £1200 a month by 2006 and I had no income whatsoever.

By Nov 2008 I had a job I loved, but paying £1000 a month, so still not exactly adding up, I'd maxed out all my cards at 3k, had a 2.5k overdraft I was at the limit of, and several loans at 9k. I'd been declined for my third consolidation loan, not surprisingly. I hadn't paid any utilities in months because I couldn't afford them (I didn't understand they were a priority debt so was paying the loans and CC's first!). When a red envelope came through the door I added it to my enormous stash of unopened mail. When I'd maxed everything earlier in the year I'd taken out a payday loan, which turned into 4 payday loans, and by November £800 of my £1000 salary was going straight out to payday loan companies! :eek:

Mid November 2008 I hit rock bottom, I got home from a 12hr shift, was cooking my 9p noodles for tea and all the electric went out. I'd been cut off!, I couldn't afford to pay the bill (months outstanding), and I had two weeks until pay day with no food in the house. I just sat in the dark and cried, all night. I had no idea what I was going to do.

The next day I confessed all to my new partner (we'd been together 2 weeks!). I was terrified he wouldn't want anything to do with me, because he's so switched on financially. But he bailed me out the first month with rent and priority debts. He paid the payday loans to get them off my back and told me if I ever took out another one he'd be out the door, that if I needed money I asked him (I never have since that first month). He helped me sort through all the unopened mail, told me I couldn't afford to live in my house anymore (by this point I was on a rolling monthly contract so could leave whenever I wanted, but was so in my rut I never had!) and told me to move in with my best mate, who was looking for a flatmate. I had to give up my cat, which was the hardest part of all of this (and the main reason I hadn't moved!), because she'd seen me through thick and thin, but she couldn't come to the flat with me. I moved on Jan 2nd 2009. My outgoings went down to £700 a month from £1200. I could afford to live again. I spent 6 months trying to catch up with the chaos I'd caused, I'd forgotten about some debts and had no paperwork for others. It was hard going.

My lightbulb moment came in June 2009. I finally thought everything was "in order", the only debts I was aware of were the OD, 2 loans and 2 CC's. I had paid all the other arrears, or so I thought. I signed onto the electoral roll. I had 2 DCA's contact me within the first 2 weeks for debts I had forgotten about. There are not words for how much that scared me. I'd let it get so out of hand that I couldn't even remember who I owed money to. I had no control. I was in floods of tears. My OH was angry, as he thought we'd sorted everything, and wasn't sure I was telling the truth about not knowing about these debts (he believes me now). I called up and paid the DCAs (they were smallish amounts) and something changed inside of me. I hated the feeling of signing away the money I'd earned, I hated the disappointment oozing from my OH. I knew even before these two shocks I wasn't really tackling my debt, I was plodding along paying minimums. I didn't want to be in debt anymore, and I didn't have to be.

Fast forward 19 months. It's January 2011. My debt has gone down from £15,800 to £6822. See this diary for the ins and out of the last few months of this, I only wish I'd found this place at the start of my journey.

Dreamer x

saorsie

You truly are an inspiration Dreamer ~ that is one h*ll of a story :eek: Thank you for sharing it, I'm sure others will take strength from learning where you started from, the pitfalls along the way, where you are at now and of course where you are heading, which is undoubtedly, well and truly debt free :T

Thank you for your advice on the 3GS - I checked with orange also and there should be no problem sooooooo guess what I've been browsing for this evening

Thanks again and I'll keep dropping in from time to time if that's ok

-s-

dreamdreamer

Of course, the more the merrier! You'll have to drop in and let me know how the iPhone is! OH has promised me one on my debt-free day after I lamented on the phone tonight (he's deployed at the mo). A 3G though, my MSE ways are so ingrained in me now that I cant bear the thought of a 2 year, £40 a month contract just for a 4g!

dreamdreamer

I got a "we're looking into your complaint" reply today from my bank today reference reclaiming bank charges from the last 6 years. I was impressed that it seemed to have been written by an actual human being and referred to my letter in such a way that the person who replied must have read it. We'll see how that pans out but I'm still not hopeful.

I also sent an email to a BMW parts company about a new centre console for OH's car - his is scratched and scuffed to high heaven (by previous owner) and he'd LOVE a new one as he's very OCD about his cars, so I thought I might treat him on his return, since he's always treating me to stuff. I'm expecting it to be about £40.

Tomorrow is my last day in my current job, I was given a secondment a few weeks ago (that will hopefully turn into a promotion!) so I'm in the same trust but different team/job. It's going to be so weird after 3 years with the same people day in day out! I'm also managing 2 people who I got the job over, so that's going to be... interesting. One will be fine but the other is already mouthing off behind my back about how he's more qualified than me (not true, just more arrogant!) and how he's going to make my life hell. Should be fun! :rotfl:

dreamdreamer

I went to see The Kings Speech with a friend this afternoon, VERY good film. Although the average age in the cinema was 75 and there seemed to be several overly talktive old ladies reminiscing about how they remember King George etc etc. Time and place people!

The whole trip, bus fare, lunch, cinema cost me just shy of £20, I also bought some stuff for sandwiches for work lunches on the way home @ £6. So a bit of an expensive day for me but I start a run of shifts tomorrow that means I don't have a full day off until Friday 11th Feb so I should have a cheap 11 days coming up! Plus two of those shifts are overtime so thats another £200 in the kitty for loan overpayments!

dreamdreamer

I've realised today that the council tax payments are going to go down in April. When we moved in it took a while to set up the installments etc (the council were incredibly slow and it took them 2 months to take any money!) so our current payments are £143 a month but our bill for 2011-2012 will be £1390 so over 12 months (which we'll do) will be £115 a month. An extra £28 a month will come in handy!

Edit: I've also just looked at the bill breakdown and realised there's no payment in March! Woohoo!