The "Pay ALL your debt off by Xmas 2012" challenge - PART 3!!!

psychopathbabble

Woohoo new update!! (I didn't stay up just to do this... I've just got in from work )

#068 5526.99/6492.82 (85.12%)

recurrent-ostrich

What to do? We sold the caravan so have £2K to play with. Hubby wants to pay it off the Next card, which has a balance of £2.7K and an interest rate of 25.9%. Which is sensible, I admit. The interest is about £50 a month.

I want to use it to clear £2K of our £3.5K overdraft. Every month we teeter on the brink of maxxing out the overdraft, I spend most of the last half of the month holding our breath to see if we go over due to an unexpected odd £2 that might go our, and we pay £50 a month in OD fees. If we do I'll reduce the OD down to £1500, obviously.

My argument is that if we clear part of the OD we'll actually be in credit (for a while) after we get paid each month, which is a huge psychological boost, and it will reduce our OD fees giving us an extra £50 a month towards our debts. Our debt total doesn't include the OD, because at the time I couldn't bear to add that to everything too but it is in my own total.

So, which? Next or OD?

Superheavy

SpagBol wrote: »

Hiya peeps, how are we all- enjoying the olympics?

Well done Superheavy, so close now:T What is your DFD?

Not really decided yet....If I'm very good and spend very little over the next two weeks till payday, I might be able to pay it all off from the next paycheque, so either 20 August or 20 September, depending on how my money goes. The one benefit of living at home with the folks is that expenditure per month is fairly low.

Thanks everyone for the support, this place is one of the most special on the internet I think. To pay off over 1/2 million between us is amazing work, and just think what we will be able to do for the economy once our spending powers are back in the black with a disposable income every month! My promise to myself is to get to know the local butcher, as proper meat and sausages are so much better than the processed stuff from the supermarkets.

recurrent-ostrich - In my opinion it depends on how disciplined you are with your account. If you pay it off on the o/d are you or your partner likely to see the extra buffer and dip into it every now and again? Would reducing the o/d by 2k actually reduce the charges, as they sound as though they are for going over the o/d limit, rather than actually for having the o/d?

Personally, if you're having £50 a month in o/d fees then that means the effective interest rate you're paying along with the interest is higher than Next, so I'd be inclined to pay it towards the o/d, and maybe reduce by 1800 or 1900 so that there is a little more wiggle room each month.

Mrs_Addicted_to_Spending

Recurrent Ostrich - I'm not sure how it would fit with the snowballing thing so it may not be the best advice but could you pay £1,000 off OD and £1,000 off Next Card? That way you won't be constantly stressed about going over the OD limit every month (been there, done that so I know how that feels :eek:) but will also have paid a big chunk of the Next debt off as well.

SpagBol

jakes-mum wrote: »

Just got back from bingo with my mum and I won £107.50 :j :j got the 2 lines and the full house

Fantastic, well done :j

psychopathbabble wrote: »

Woohoo new update!! (I didn't stay up just to do this... I've just got in from work )

#068 5526.99/6492.82 (85.12%)

Great total, well done :T

recurrent-ostrich wrote: »

What to do? We sold the caravan so have £2K to play with. Hubby wants to pay it off the Next card, which has a balance of £2.7K and an interest rate of 25.9%. Which is sensible, I admit. The interest is about £50 a month.

I want to use it to clear £2K of our £3.5K overdraft. Every month we teeter on the brink of maxxing out the overdraft, I spend most of the last half of the month holding our breath to see if we go over due to an unexpected odd £2 that might go our, and we pay £50 a month in OD fees. If we do I'll reduce the OD down to £1500, obviously.

My argument is that if we clear part of the OD we'll actually be in credit (for a while) after we get paid each month, which is a huge psychological boost, and it will reduce our OD fees giving us an extra £50 a month towards our debts. Our debt total doesn't include the OD, because at the time I couldn't bear to add that to everything too but it is in my own total.

So, which? Next or OD?

I'm not sure but I think I err on the side of your DH. Whilst we are the same (high interest OD maxed whilst paying off high interest cards) the cards are about the same interest and I am much more disciplined in paying off the cards. So if you can pay off the £2k from your OD, reduce the OD facility by £2k and then concentrate on overpaying the Next card then I would do that. If you would put £2k into a black hole and then try and be disciplined in not maxing it again I wouldn't do that (done that before and then ended up double in debt!!) and would pay off the card. For us once this high interest card is gone (in about £4k's time) we will then reduce the OD whilst the rest of the debt sits on low interest cards. Have you used the snowball calculator to tell you the end result of both plans?

I have a payment to declare:

#084 £11,544 / £58,000 19.92%

Very nearly 20% :T

tirlittan

Jemma - Thanks for the update on first page!

affordmylife

recurrent ostrich - personally i would pay off the next account and then try to pay of the remaining £700 as a priority. then it would be gone forever. i would close the account and only go into the store. no temptation then.

with the overdraft i would try to reduce it by £50 each month as part of a planned attack on debts. i like to see them all getting a little bit so they are all going down.

i just had a look on page one. its brilliant to see our totals going down. some brilliant percentages on there.

however there are a large number of people who havent started. that was me last year i just wasnt ready. but this year (with a little more debt than before) in so up for the challenge. i am now beginning to think of the things i will be able to do next year with the spare money i will have. around £500 a month - to do whatever i want with!!!!! i literally cannot wait x

HelenPie

recurrent-ostrich wrote: »

What to do? We sold the caravan so have £2K to play with. Hubby wants to pay it off the Next card, which has a balance of £2.7K and an interest rate of 25.9%. Which is sensible, I admit. The interest is about £50 a month.

I want to use it to clear £2K of our £3.5K overdraft. Every month we teeter on the brink of maxxing out the overdraft, I spend most of the last half of the month holding our breath to see if we go over due to an unexpected odd £2 that might go our, and we pay £50 a month in OD fees. If we do I'll reduce the OD down to £1500, obviously.

My argument is that if we clear part of the OD we'll actually be in credit (for a while) after we get paid each month, which is a huge psychological boost, and it will reduce our OD fees giving us an extra £50 a month towards our debts. Our debt total doesn't include the OD, because at the time I couldn't bear to add that to everything too but it is in my own total.

So, which? Next or OD?

I have to agree with Superheavy, SpagBol and affordmylife and say that the overdraft tends to be a weak spot for many so clear the cards first, as temptation to spend on it will be lower.

I've cleared OH's OD twice since starting this challenge and each time he's maxed it out again in 4-6 weeks :mad: I've decided that if it's already at max then it can't get worse and the debts will clear faster if we focus on other areas.

It may not appear to make the most sense as far as interest rates are concerned but in the long-term I think it will

HTH

H x

tirlittan

I agree with peeps above, pay next debt first, then it's almost one debt gone for good!

I'm 3 months away from being debt free and I'm getting serious ants in my pants. I want it gone even quicker!!! I'm trying to find a way to get it done in the next two months but I just don't seem to have the money, nothing really to sell either and some new expenses coming up. So frustrating but I guess I should be glad as 3 months is nothing after all these years!

It's 'only' £140ish that I would need to find but I can't think how!

Credit-Crunched

Hey strangers!

Not been on for about 4 months, been very very busy working!

Update on debt, started year on £13,496

I have no got £5,470 left having paid off nearly £8,500 this year!!

Only remaining debt is a c/c which is on 0% until November 2013, I have set up a direct payment to that card of £350 a month to have it cleared by the time the debt is due. So pending a miracle I will not be debt free by the end of the year, but I am in a much better place and far far more in control of my debt.

I take out cash every week and use that not the dreded debit card, so much more relucatnt to spend £2.50 on a coffee when it means breaking a note.

I will have a trawl through the pages to see how you are all doing, but I hope everyone is succeeding, even a small amount makes a huge difference!

Also Christmas is paid for as i have set aside money every month this year for food and presents, so no backwards steps in Dec for this one!!