The Plan - an outline!

TheTortoise

Hello,
Has been inspiring reading all the posts on this board - I've been a lurker for a few months and now feel that posting my own situation will spur me on to continue making the changes that I need.

Had my lightbulb moment 1st January this year which made me realise that paying off just the minimum amount whilst still having a nice time with my wages (with nothing really to show for it) wasn't going to get me anywhere, so...

Transferred balances so now have 2 0% deals. One will hopefully be paid off by November this year (not long to go!) Once that is done I can use the money to begin paying off the second card in earnest - should be able to manage £375 a month and pay it off within the promotional timescale. Although this card is 0% and my overdraft isn't I think psychologically it will do me good to finally rid myself of credit cards after all these years.

Once I am free of credit cards (so exciting) I will use all the money to pay off overdraft - probably by that time would be able to manage £400 a month if my promotion goes through at work. This will mean overdraft paid off in 6 months.

Not sure after this whether I will try to settle my loan early or just continue with payments...will see what the situation is like in 18 months. It might be better just to save in earnest and build up a nest egg.

It feels so good being in control and seeing the end of the tunnel, even if it is 2 years away.

Reading all your stories has also helped me to look at my frittering and try to reduce that. I'm also making money throgh car boots etc, and looking at starting to make some Christmas presents starting in September so that I can spend less in December. Thank you so much for the inspiration! I have days where I'm silly and go out for lunch or buy extra food that I don't need, but on the whole this site is starting to kick that habit out of me!

Cannot wait to be debt free!!

The Tortoise (paying off slowly but surely!)

yorkshire-lad

Hi and welcome to MSE:).

Glad to see your tackling the credit cards, it really is a good feeling in seeing your debt come down.

How long is your MBNA deal for? If it's less time than your santander, you may be better throwing the extra cash at that one.

Why don't you pop over to the old style boards, there are some great tips on saving Money on food shopping, cooking in bulk etc.

If you have some things you can sell, it may be worth putting them eBay first before car boots, it has a larger audience and if they are collectable items they will sell for more.

Oh and have a look at some of the ongoing challenges to make debt busting that little more fun:p.

Keep us updated!

YL

TheTortoise

The MBNA has over a year left whereas the Santander only has 2 or 3 months left on it, so I'm just paying the miminum on the MBNA for the time being.

You're right it is such a good feeling - I really can't wait for that debt free day!

I'm having doubts though over whether I should tackle the overdraft before the MBNA, but I would be worried about still having the CC debt after the 0% deal ends. Any advice?

I will give ebay a go, and may list a few things on the work online noticeboard.

Thanks for the reply!

yorkshire-lad

Are you getting charged for the OD? Do you pay a monthly charge?

It's always best to pay the highest interest debt first.
After the santander card is paid, it may be worth just splitting your available cash and pay 50% to each.

Or, you could just pay the OD off, and apply for another 0% card when your MBNA runs out, then just transfer the balance again.
If you do decide that route, I would be tempted to close the Santander account down after it is paid.

Any extra cash you can make, either by saving money by not buying food you don't need or selling things, chuck it at your OD.

TheTortoise

Yes I pay £7 account fee (to allow me to have the overdraft) and around £16 a month interest on the overdraft. Hmmm I guess it would make sense to do this next - it would be paid off in 7 months assuming nothing changed in the rest of my finances, and then I could stop paying the account fee, and have an extra £20 towards CC debt.

I would still them have 5 months to pay around £1800 off the MBNA. This would leave approx £2500 to find to transfer to another 0%.

I guess I just can't wait to be rid of the blooping credit cards!! I will consider doing the overdraft first I think.

Really appreciate the replies! Although its far in advance it helps to see the bigger picture rather than just living month by month.

Edited to add:
Yes I will be closing the Santander as soon as its finished. I *may* close the Barclaycard although at the moment it's good to have some backup should I ever run out of cash for fuel (it's a main outgoing - need it for job and public transport not an option).

Hovel_lady

Just wanted to wish you luck with your plans
Look forward to hearing how you get on x

throughtherain

Great post. Good luck with the plan, which sounds good!

I was in exactly the same position in February this year when I realised I had been in similar debt for 8 years just paying minimums. Feels SO good to take control.

ixia

good luck with your debt busting

Firewalker

Hi there. If I were to snowball this one I'll hit Barclaycard, after that hit Santander with £380-£400 pm. This gives you enough time to get rid of it. After that will tackle overdraft and last the loan - for this one will check whether there are penalties for overpayment. If there are will sav the money (snowballing again) and whether I pay it early will depend on the difference between the interest and the penalty. If the interest is similar to the penalty will just let it roll and will save what was paying on the CC - or similar but no lower that 20% of my income.

In two years I wil be financially healthy.

Good luck.

Firewalker

TheTortoise

I have a Barclaycard, MBNA and Santander. Have just closed a Virgin. If I needed another 0% in a years time would I be likely to find one bearing in mind it will have been less / only just a year since closing? I have a good credit rating as far as I am aware (checked in Jan).

What I absolutely don't want is to start paying CC interest again, so if there is even the slightest possibility that this might happen I would want to tackle the MBNA before the OD.

Dilemmas! Ah well don't need to decide really until October/November so have some time to research. Thank you so much for advice it is very gratefully received.

In two years I WILL be financially healthy. Am looking forward to saving everything I am currently spending on debt.

Firewalker

My answer would be that there are no guarantees. Hard times are coming for financial institutions again; even if 0% deals are around there is no guarantee you will be approved. The only sure way not to go back to the high interest that your Santander card has (assumption, I know) is to pay it off. And it works out exactly right.

FW