My Lightbulb Moment

vka1

Hi Pete,

Another comment on the counselling i'm afraid! Anyway, like you it's a process I engaged in for a couple of years, with some breaks along the way. Earlier this year when I sat down to do my SOA etc., I realised how much of my income I was spending on it. After digesting almost every other area of my life, money was something I'd managed to avoid talking about with him. He knew I had debt and worried about money but we'd never tackled it head on.

It just all came out one day. It was good to talk through my debt and he reasons behind it with my counsellor. After working out my budget, and finally admitting the extent of mess I was in to another real person (rather than the virtual MSE chums) we worked out an exit plan. We agreed the things that still needed tackling, how many sessions this would take, reduced their frequency and started to talk about what i'd do to sort my debt mountain out. It was fab. It was the one big thing left hanging over me that I hadn't faced and it was brilliant (although very hard) to do. I finshed up with my counsellor 5 or 6 sessions later.

I know he's there to go back to if I need him, the safety net is nice. I also feel so much better knowing that finally i'm tackling the financial can of worms one worm at a time and fixing it for myself. Talking to your counsellor about the money could just be a huge weight lifted for you - reducing the debt and tackling the issues behind it at the same time, and a massive step towards regaining financial control.

Good luck and look forward to hearing how you get on,

V

Little_Miss_Uni-Debt

Hi Pete,

Well done for starting to take charge of your debts! :jFirstly I would suggest getting a new current account with NO overdraft. It would need to be with a company that you don't owe anything to. I hear co-op cashminder is good.

I found it was a real psychological demotivator to be constantly living an overdraft, always seeing the minus sign, incurring charges.

With a new current account, you can have your wages paid in there, then you have full control over your £2k a month and a fresh start.

You can then pay your old overdrafts as normal debts, (make sure you cover the interest each month and keep it in limit)

I would also suggest that anything in your SOA that doesn't happen monthly, i.e annual or ad hoc spends - TV license, insurances, haircuts, presents etc it's really important that you physically put money aside for these each month. Either in a savings account or in an envelope.

Often when these large spends come around and you don't have the money for them that is when you feel forced to crack out the credit card, which will set you back.

I know it feels a huge amount currently, but with your current shortfall of £323 monthly, its easy to see how over 3 or 4 years it adds up to £15k.

It's great that you've caught it before it got higher, now you can slowly bring the spending down and push to clear the debts. :T

Best of luck, keep us updated!

One final Q... The RBS/A+L charges in your SOA, are they overdraft interest or are they the charge for the premium account?

You need to add in your overdraft interest into the debt section of your SOA. You are paying this without realising. It would be around £19.65 per month for your RBS at the rate of 17.63%. Is there any interest for the A&L overdraft?

Skint_but_Optimistic

Hi there, didnt want to read and run.

Congratulations on your lightbulb moment. It just feels so much better to have it all out in the open.

There are savings to be made - and changing how you think about money is one of the best things which happens.

I cant remember the last time I ate at Mcdonalds. I didnt really like them, but would eat there because it was convenientat least once a week.

Now I meal plan, batch cook, sell on ebay - buy on ebay if i NEED anything, dont buy what I dont need.....

Enjoy it, theres loads of advice on here, and some great hints and tips. Youve had some fantastic advice.

afcwfan

Skint_but_Optimistic wrote: »

Hi there, didnt want to read and run.

Congratulations on your lightbulb moment. It just feels so much better to have it all out in the open.

There are savings to be made - and changing how you think about money is one of the best things which happens.

I cant remember the last time I ate at Mcdonalds. I didnt really like them, but would eat there because it was convenientat least once a week.

Now I meal plan, batch cook, sell on ebay - buy on ebay if i NEED anything, dont buy what I dont need.....

Enjoy it, theres loads of advice on here, and some great hints and tips. Youve had some fantastic advice.

Hi there,
I have never used a forum before so I hope I don't make a complete hash of this, but I have a question: how did you reduce your debt by about half in such a short space of time? Sorry, if this info is already on the forum elsewhere perhaps you could let me know where to find it. Thanks.

Skint_but_Optimistic

Hi there I have a diary and it states how I got there - basically i negotiated some very good settlement figures on debts which were in a real mess.

afcwfan

Skint_but_Optimistic wrote: »

Hi there I have a diary and it states how I got there - basically i negotiated some very good settlement figures on debts which were in a real mess.

Thanks "skint but optimistic" - um, I've just looked through 15 pages of "debt free diaries" but cannot find yours - am I looking in the wrong place?

Skint_but_Optimistic

https://forums.moneysavingexpert.com/discussion/3221386

thats my trip so far, just plenty negotiation and letter writing - im onto reclaiming ppi now and Ive 6 of those ongoing!!

quartzy

Just a thought but could you cancel all your credit cards, and get just one with a balance transfer of 0% with 0% interest for some time on it. And stop spending on creidt cards, the first thing you need to do is address your overdraft though, as that affects your daily cash needs.

After a year if you still owe a lot, a bank loan is cheaper than credit card interest.

As you say you dont need the car, sell it and see if you can get the insurance back for the unused time. Then pay off the overdraft/credit cards with it.

If you moved into the front room for a while, you could get a student lodger for a few months.

Couselling sessions are just as good once a fortnight, giving you more time to think in between, and perhaps make notes on what to talk on next fortnight, to make good use of the couselling, I know with depression memory is affected.

saint_steve_2

Pete, well done on your LBM and the steps you have taken so far. Can I ask, is the debt related in any way to your depression? Also, are you still benefitting from the counselling as you were when you started? As others have suggested, it would be worth asking your GP if you can get access to counselling on the NHS.

Have you decided when you want to be completely debt-free? If not, now's the time to do it. Think about when, how you want to feel when you've done it and who you're with when you want to make that last payment. Realising the outcome can be the best way to help you on the road to success as you then find it easier to create the path to get you there.

This is a very powerful step, one that effectively you have done yourself and you will enjoy the journey :-)