Time to ditch the debt!

jmf76

Hello all,

I've been reading the posts on here since I joined and decided last year to sort my non-mortgage debt. My attempt so far is below (I've split it into 1 month per post to make it easier to read!)

Lightbulb moment 01/09/2006
Sept 06
Barclaycard 4.9% life of balance £1440.00
American Express 4.9% life of balance £4356.76
Egg Money 15.9% £969.59
Smile Credit 9.9% £1784.93
Car HP 11.4% £5175.95
Dreams 0% till Jan 2007 £300
Student Loan 2.4% £3438.80
Partner's overdraft £10 p/month acct fee £227.11
Total debt £17,693.14 :eek: :eek: :eek:

jmf76

Oct 06:
I had 0% for 5 months anniversary offer on my Egg Credit Card, so decided to use it. Also paid Egg Money off using my overdraft as it's at a lower interest rate. Debts now are:

Barclaycard 4.9% life of balance [STRIKE]£1440.00[/STRIKE] £1444.75
American Express 4.9% life of balance [STRIKE]£4356.76[/STRIKE] £4265.47
Egg Credit 0% for 5 months [STRIKE]£0[/STRIKE] £2500
Egg Money 15.9% [STRIKE]£969.59 [/STRIKE] £233.01 CREDIT!!
Smile Credit 9.9% [STRIKE]£1784.93[/STRIKE] £144.46 CREDIT!!
Car HP 11.4% [STRIKE]£5175.95[/STRIKE] £4975.14
Dreams 0% till Jan 2007 [STRIKE]£300[/STRIKE] £240
Student Loan 2.4% [STRIKE]£3438.80[/STRIKE] £3359.10
My overdraft 6.9% [STRIKE]£0[/STRIKE] £981.67
Partner's overdraft £10 p/month acct fee [STRIKE]£227.11[/STRIKE] £222.88
Total debt [STRIKE]£17,693.14 [/STRIKE] £17,611.54 :eek: :eek: :eek:
Debt reduced by: £81.60 pretty poor but at least it's a start.

jmf76

Nov 2006
Mistake 1:Didn't realise until too late I would be charged £75 for the privilege of Egg's balance transfer of £3000 (plus they charge interest on this!!!)
Mistake 2: I set up a DD on my Barclaycard, thinking I'd set it up in time for my first payment - wrong. I got charged £12, life of balance rate was removed from my outstanding amount and I get a bad mark on my credit report. :mad: :mad: :mad: Had to transfer balance to not incur interest at higher rate.

Debts are now:

Barclaycard 4.9% life of balance [STRIKE]£1444.75[/STRIKE] £0 (Final balance of £1462.57 tfr'd to Smile Credit )
American Express 4.9% life of balance [STRIKE]£4265.47[/STRIKE] £4175.26
Egg Credit 0% for 5 months [STRIKE]£2500[/STRIKE] £3010
Egg Money 15.9% [STRIKE]£233.01 CREDIT!![/STRIKE] £0
Smile Credit 9.9% [STRIKE]£144.46 CREDIT!![/STRIKE] £1608.79
Car HP 11.4% [STRIKE]£4975.14[/STRIKE] £4772.42
Dreams 0% till Jan 2007 [STRIKE]£240[/STRIKE] £180
Student Loan 2.4% [STRIKE]£3359.10[/STRIKE] £3279.30
My overdraft 6.9% [STRIKE]£981.67[/STRIKE] £0 :j
Partner's overdraft £10 p/month acct fee [STRIKE]£222.88[/STRIKE] £214.92
Total debt [STRIKE]£17,611.54[/STRIKE] £17,240.69 :eek: :eek: :eek:
Debt reduced by: £370.85 Happier than last month

jmf76

01 Dec 2006
Opened an Argos card to 0% for 9 months (Xmas purchases). Managed to pay off my partner's overdraft and switch his account to one that no longer has a monthly fee. Closed my Barclaycard account, but have kept my Egg Money acct open (waiting for £70 cashback due in March 07). Also having to use my Smile Credit card for purchases altho do get 0.5% cashback on these the following month. Also had to use my overdraft again
Debts are now:

Argos 0% till Aug 2007 £256.42
[STRIKE]Barclaycard £0[/STRIKE]
American Express 4.9% life of balance [STRIKE]£4175.26[/STRIKE] £4087.23
Egg Credit 0% for 5 months [STRIKE]£3010[/STRIKE] £2947.16
Egg Money £0
Smile Credit 9.9% [STRIKE]£1608.79[/STRIKE] £1834.48
Car HP 11.4% [STRIKE]£4772.42[/STRIKE] £4567.78
Dreams 0% till Jan 2007 [STRIKE]£180[/STRIKE] £120
Student Loan 2.4% [STRIKE]£3279.30[/STRIKE] £3199.39
My overdraft 6.9% [STRIKE]£0[/STRIKE] £1027.37
Partner's overdraft £10 p/month acct fee [STRIKE]£214.92[/STRIKE] £0
Total debt [STRIKE]£17,240.69[/STRIKE] £18,039.83 :eek: :eek: :eek: :eek: :eek: :eek: :eek:
Debt increased by: £799.14 Bloomin Xmas spending :mad: :mad: :mad:

jmf76

Ok I've realised that I'm not doing well at this so far, hence the thread - I'm hoping seeing it in black & white will make me finally do something about it. I'm also hoping some of my actions this New Year will help too.

01 Jan 2006
New Year Actions!
1. I have opened a separate current account which I put £750 into a month to pay off my debts.
2. I've applied for a & More card (low APR) (and it looks like I've been accepted) - depending on credit limit, I shall transfer some/all my Smile Credit & Egg Credit across to it.
3. As my Dreams acct is paid off this month, I'm using the money to set up a DD for Argos next month so it will be paid off before 0% deal ends.

Argos 0% till Aug 2007 [strike]£256.42[/strike] £256.42
American Express 4.9% life of balance [strike]£4087.23[/strike] £4000.33
Egg Credit 0% for 5 months [strike]£2947.16[/strike] £2885.43
Egg Money £0 - awaiting cashback!
Smile Credit 9.9% [strike]£1834.48[/strike] £2392.68
Car HP 11.4% [strike]£4567.78[/strike] £4361.19
Dreams 0% till Jan 2007 [strike]£120[/strike] £60
Student Loan 2.4% [strike]£3199.39[/strike] £3119.38
My overdraft 6.9% [strike]£1027.37[/strike] £834.42
Total debt [strike]£18,039.83[/strike] £17,909.85 :eek: :eek: :eek:
Debt reduced by: £129.98 but still £216.71 more than I started!

spaghetti_monster

Hi there!
Why don't you post your SOA - there could be more ways to save money and reduce the debt?

good luck!

CLAPTON

you're doing very well indeed in managing to keep the interest rates on the debt down. But now is the time to concentrate on drawing up a proper budget and concentrating on the spending side.
I'm sure posting a SOA will help you and i'm sure people here will be able to help.

jmf76

Thanks for the tips. Right here's my SOA:

Income
After tax etc Total ~£2100

Monthly Outgoings
Home - £1066
Mortgage £493
Elec £40
Water £15
Council Tax £125 (altho should be ~£95 as of Apr)
2 mobile phones £60
Telephone £11 rental & ~£3 calls
Internet £18
Groceries £250
Leasehold & management fee £51

Insurance - £26
Critical Illness £16
Home Contents £10

Savings - £25
10 year bond £25 I'll lose some of the money if I cancel this so am reluctant to do so.

Transport - £135
Partner's bus fare £22
Car diesel £40
Car Tax £10
Insurance £38
Breakdown £3
Service & MOT £22

Other - £165
Gym £35
£30 Weekly spending - £130

Spending Total £1417

Debt
Debt Interest Rate Current Balance Min monthly payment
Argos 0% till Aug 2007 £256.42 £0
American Express 4.9% life of balance £4000.33 £103
Egg Credit 0% for 5 months £2885.43 £63
Smile Credit 9.9% £2392.68 £34
Car HP 11.4% £4361.19 £250
Dreams 0% till Jan 2007 £60 £60
Student Loan 2.4% £3119.38 £84.20
My overdraft 6.9% £834.42 - will have cleared by end of month

Debt Total £594.20

CLAPTON

your SOA shows that you have about 100 spare for further debt reduction, where as the increase in your debts shows you are spending 100 more per month than you earn. so we need to find out where that 200 a month is going.

keeping a spending diary is a very good start, write down everything you/OH spend. so maybe you spend something on work lunches/coffees, haircuts, newspapers/magazines

also look at annual/one off spending...at the moment you have nothing down for xmas or birthday presents, holidays/weekends away, as a propery and car owner you need an emergency fund in case of unexpected costs.

do both you and your OH both work? can you get an parttime job ?

things you can reduce

mobiles ..can you down grade to PAYG and only use for emergencies (10 per month)
GYM ..you really can't afford it.
cash in the 10 year bond ..they give a dreadful return (less than a good building society) and its a bit extra against the debts.
food ... by meal planning and being careful it should be possible to reduce to 200.

jmf76

Thanks Clapton,
I'll definitely work on the spending diary - I do use a copy of Money to keep most of my accounts in but will start to use it for day-to-day spending aswell.

One-off spending tends to go straight on to the CC, that's what happened with Xmas last year.

We did struggle for a while as my OH only worked part-time, however he is full-time now as am I. In fact my OH does more hours than me and gets paid for overtime, which he does do when he can. I've considered getting a part-time job by am finding it difficult to find the time and sadly my job can mean long hours altho I don't get paid for the extra time. Also my OH doesn't drive so I sometimes have to take/collect him from work when buses aren't running altho he's now decided he wants to learn to drive which is going to cost another £800 which worries me!! We're also getting married next year and need to try and get some monies together for the honemoon!

On your notes on reducing bills
mobiles ..can you down grade to PAYG and only use for emergencies (10 per month)
We're both in 18 months contracts which have 12 months on each. However we do get 1/2 price line rental in the form of cashback - currently waiting for £150 chq atm which cuts it down to £15 p/month each, just have to pay the money out beforehand. I'm definitely considering going on PAYG tho once my contract expires as I don't use mine, However OH's phone is like an extra limb, but will look at reducing the monthly tariff on his.
GYM ..you really can't afford it.
I can't cancel this until Apr (min 6 month contract) and it's a bit of a lifeline for me. However I shall try and get OH to come out running etc. with me between now & Apr if I can keep fit without the use of the gym then I will consider giving it up.
cash in the 10 year bond ..they give a dreadful return (less than a good building society) and its a bit extra against the debts.
Have phoned Scottish Friendly - they are sending me a breakdown of what I will get if I cancel the acct in the post today.
food ... by meal planning and being careful it should be possible to reduce to 200.
Will start today - my OH loves his chocolate and take-aways, but shall try and cook more - have no excuse as I asked for a slow cooker for Xmas!

Curlyz

Nov 2006
Mistake 1:Didn't realise until too late I would be charged £75 for the privilege of Egg's balance transfer of £3000 (plus they charge interest on this!!!)
Just a note - you will only pay interest on this £75 after the interest free period if you haven't paid it all off by then