Clearing £10k off the credit cards in 2012

LBTW

Having spent the last nine months browsing these boards I have decided it’s finally time to get involved. I added up my total credit card debt the other day and it currently stands at £15,533.03. I’ve always used my credit cards as and when I wanted and never really worried about it but I’ve decided it’s time to really get rid of this debt.

About £10k of this debt is on 0%, with another 1k at 6.9%. The remainder is around 21-22%. Snowballing my debts would see me debt free in 25 months but I think with a bit of application on my part I could get this down. Current projections show I should be able to clear £6.5k by the end of this year. However, I’ve decided to try and push myself and have set a target of reducing my debt by £10k this year.

My plan for getting rid of £10k of debt this year is as follows:
1. keep a spending diary (I know I spend too much, I just don’t know how much)
2. earn more. I start a new job in the Spring which will hopefully see me earn £150 more a month than I currently do which I can then throw at the debt.
3. meal plan (I spend a fortune on lunches at work when I’m working away from home and then when I’m at home I’m generally too tired to be bothered planning dinners in advance. My new job should help this enormously as I’ll not be travelling so it’ll be easier to plan)
4. cancel my Gym membership which I never use and save £40 a month to put towards the debt
5. reduce my phone contract when it expires in May of this year
6. use my energy monitor and try and find out why my electricity is so expensive so I can get this down
7. do surveys for vouchers / cash

I’m hoping that coming on here and updating this diary will keep me on the right track. I’m focussing on my credit cards at the moment. I also have an overdraft and a car loan, but I want to work on the credit cards first.

happihorse

Hello!

I am also a bit of a lurker but keep meaning to start a diary to try and get myself organised, accountable and focused.

Sounds like you have got a plan and some achievable ways of getting there.

Good luck for 2012!

happihorse

LBTW

Thanks very much. I've learnt a lot from lurking on this site, but it's the accountability bit I think I need. I'm hoping that having to come on here and confess my progress to you guys will make me work that little bit harder!

Need to head out just now seeing as the gale force winds have died down (I'm in Scotland and I woke up this morning and my flat was shaking!!) Later I need to find the offer of a 15 month 0% balance transfer from one of my CC's which came in just before Christmas and transfer as much as I can across. It may take some finding though as I'm sure I put in somewhere 'safe' in my haste to tidy up for Christmas...........

LBTW

DaisyMeRollin

Hi LBTW,

I think most of the things I've put away safe have never been seen again so good luck finding it! I think a diary to keep yourself accountable is a great idea and having a plan of how to complete your goals can really encourage you!

Good luck in 2012!

LBTW

Thanks Daisy. I had a look at your diary - I've never come across the 60 percent solution before but it made me go and take a look at my committed expenditure as a % of my income. I only spend 53% of my income on committed expenditure. However I spend 22% on unsecured debt, which leaves me 25% to spend as I wish. I think the challenge for me will be to reduce that 25% as much as possible and throw a chunk of it at my debts.

LBTW

DaisyMeRollin

Yeah, I think that plan is really for the ideal situation where you have no real debt and only really need a plan to save but the piggy banking aspect of it really attracted me! What really spurs me on is the thought of all the money that'll be freed up once the debt is gone (or at least reduced). I imagine that once we've gotten used to living in a manner where we can pay off the debts then when we finally have the money for ourselves we won't know what to do with it! (although I'm sure we'll manage somehow...) :-)

LBTW

I know what you mean about the money freed up once the debts are gone. I realised recently that with the amount I'm spending every month repaying my debts, once they're gone I could save up for a really good holiday in less than six months. It just highlights for me the amount I spend on debt and makes me realise that that money could be all mine once the debts are gone. Something to keep us motivated.......

LBTW

Found that balance transfer offer and have moved another £2.5k on to 0% for 15 months, which will really help me pay off as much as possible this year.

LBTW

In the last couple of days I have
- got up earlier than usual to have breakfast at home (I usually stop and buy breakfast on my way into work)
- taken a packed lunch to work
- overpaid my credit cards by £49

Next on the list.......... cancelling my gym membership

LBTW

After a really crazy January, I've today taken stock of how I got on during the first month of my challenge....

The good news is that my debt has reduced by £606.75!!!

The plan for February:
- chase up £50 which is due to be refunded onto one of my CC'S
- use the £105 which I don't have to pay in council tax and send it to one of my CC'S
- chase up my gym membership cancellation, which will save me £38.95 per month

This month I start my new job so things might be tight for a bit as my pay date is changing so I won't get a full month's pay at the end of Feb. However, I'm getting a pay rise so in the long term this will really help me pay down my debts.

I've got a spreadsheet which shows how much I expect to owe at the end of 2012 based on my current minimums and additional payments and it shows I should have £8,455.37 outstanding. Paying off £10k in the year means I'm aiming for £5,533.03, so have £2,922.34 (excluding interest) to find. I expect about half of this to come from my wage rise but that still means there's lots of work to do.......

LBTW

End of February update........

My total credit card debt now stands at £13,809.85 which means I've paid off £1,723.18 since the start of the year. Really pleased with that effort!!

It turns out February wasn't as difficult as I thought it would be money wise changing jobs and changing pay dates, so I even managed to pay some extra off the CCs. By the end of March my new salary will have settled down so I'll be able to work out a definitive budget for the rest of the year.

Still have quite a lot of my original list to work on mind you. I still need to
- meal plan better and reduce my food shopping bill
- reduce my electricity usage
- see if I can up my income by doing surveys

Onwards and upwards........ only £8,276.82 to go!