Aim high - help us hit the target

mr2jay

Well, that's a relief....

Just ran through the snowball calculator to ensure that the payback plan is watertight...

Based it on the minimum free each week to repay debts and it gave me exactly the same plan as I had worked out for myself (Namely, once the council tax repayment is sorted, hit the Lloyds Credit Card hard before moving onto the Virgin one....)

Really think I can do this - step one though is to clear off the council tax for the year freeing up about £400 a month then batter the Lloyds one. With it snowballing (and the APR being highest on that card) it is amazing how quick it comes down....

Here goes!!!

[Deleted User]

With regards to your debts - (other than priority debt eg the CTax which you are already tackling), pay the minimum payment towards ALL debts, and then overpay whatever you have available towards the debt that is costing you the most in interest (highest APR), so with the debts that you have listed below. Pay the minimums towards everything, and overpay on the Lloyds debt until it is fully repaid (unless there is a change in the interest rate of any of your debts - if that happens re-evaluate). Once this debt it fully repaid move on down the list until they are all gone.

This way you will be paying the debts off the quickest, minimizing the interest repaid and maximizing the amount the actual debt is reducing each month.

Unsecured Debts
Description....................Debt......Monthly.. .APR

1. Lloyds.........................4449.48...88.8..... .21.9 This should be your priority until fully repaid

2. Overdraft......................2500......0........ .19.3

3. Virgin.........................3569......120...... .16.8

Total unsecured debts..........10518.48..208.8.....-

mr2jay

Thats the plan - when I realised that the LLoyds CC was the one with the highest interest rate, I decided that it was the one to tackle first as each payment will lower the actual interest they charge, meaning each month we are a little better off (hence it snowballing until cleared)

The rest will be kept happy with the overdraft being the last to clear off (although I am planning on squirrelling a little away each month into a savings account to go towards that hurdle come the end) The reason for the savings, which will only be about £20 a week, is 2 fold. If we have a bit saved up and say the washing machine kills itself, we have real money rather than using the credit card to replace it so we aren't taking a step backwards.

We are lucky in that our sofas we bought outright, our cars we own with no finance, all our electrical goods are ours so I have proved that we really don't need credit to live. We built this up over a daft amount of time when things were REALLY dire (was out of work for 8 months and unable to claim benefits) so now we are in a better place, we are in a position to fight tooth and nail to clear this all off.

On top of that, I am due a whiplash payment (of about £2,500) and a tax rebate (of about £400) in the next couple on months which will be a huge chunk taken off our debts. The intention is to use this to completely clear the outstanding council tax (while paying it off at the agreed rate until this point) and stuff the remainder onto the Lloyds Credit Card, taking a chunk out of that one.

My aim is to clear AT LEAST £5,000 off by the end of the year (will probably be a fair bit more to be fair) and clear the remainder next making us debt free!!!!

slowlyfading

Good luck, I think you can do this

Have a good look at what you spend on food shopping - this really is an area where you can cut back for a couple of months and then throw any spare money to the Lloyds CC, as the fastest you can get the balance down on that the better! have a look around the OS board, I know you've started on this, but there are so many ideas on there to help you out. Good luck with the fruit and veg growing too

Another idea - do you have anything you could sell? Anything that you could pop on ebay or amazon? Just trying to think of things that would bring some more pennies in and make the situation a little less tight. Also, if you buy things online, have a look at topcashback and go through there first - all these things add up!

I'm going to subscribe to your thread so I can read about your progress admitting to the debt is the first massive step, so well done!

mr2jay

Thanks, although we have had our first set back already

We recently changed energy provider after comparing prices from NPower to E.On, dropping our monthly DD from £97 to £82. Sounded great which is why we have done it.

What has REALLY got my hackles up this morning however is we have recieved a final bill from NPower for £408 for just the gas element of our energy bill payable before the end of May!!!!

I mean, how in God's name is this possible? We were supposed to save money and have ended up with a massive bill completely out of left field? Effectively, this means that our DD should have been 68% higher than what they charged us. What makes this worse is that we had the heating on for about 4 weeks over the winter (we are country souls and both grew up on draughty old cottages with no heating and hate the house being warm) and we only have the boiler on the gas (electric everywhere else).

Sorry for the rant, in a state of utter disgust here as none of this was mentioned at the time of the switchover and we both feel we have been shafted when we tried to save money each month

slowlyfading

Did they come and do a final reading? If you really don't think you've used that much gas, you need to make sure that's how much you owe - as that is an awful lot of money! :eek:

If it is, then this month may be a tight one, but you can get through it with some careful planning

mr2jay

I know and thanks for your encouragement.....

Truth is that unless I work stupid hours to increase my earnings, There is no way I can factor this in for this month. I will have to work out how to spread it if this is indeed the right figures. Trust me, if they are then I will be going ballistic at a) E.On for not highlighting that the final bill may be high due to the winter months and b) NPower for not explaining the direct debit system properly to us prior to us attempting a change over.

On the plus side, I have just done a quick tax calculation for last year on my earnings. I am not sure if this is right (seems too high to me) but based on the figures on my last payslip for 2011/2012, I should be due a £1500 tax rebate!!!!

Now, I am skeptical and my P60 for last year should be with me in the next few days but that will certainly be a healthy boost to clearing some of this off

cally6008

mr2jay wrote: »

We recently changed energy provider after comparing prices from NPower to E.On, dropping our monthly DD from £97 to £82. Sounded great which is why we have done it.

What has REALLY got my hackles up this morning however is we have recieved a final bill from NPower for £408 for just the gas element of our energy bill payable before the end of May!!!!

Do you take regular energy readings yourself and keep a note of them ?

Make sure that both Npower and Eon have the same final reading and opening reading

The company you have left may have charged you for leaving

mr2jay

Just been back and looked over the NPower figures and as much as it annoys the hell out of me, they are correct.

Does bring up the next question of how did we use so much? The only thing I can think of is that the boiler is on the blink so I might get the Landlord to have a look at it...

Yet another debt to add to the list

Oh, and checked my tax figures and no rebate due. I was basing it on the wrong number on the payslip. I have actually under paid by 18p

All in all, not a great day but time to stick out the chin, accept the facts for what they are and get stuck in to paying them off.

One plus though, I was browsing through the site and found an article on getting a really cheap shop from Tesco. Think I will give that a go this week rather than just going to the store and shopping. Should save a fortune there this week

slowlyfading

Remember when you food shop - do a menu plan for the week and only buy what you definitely need. Go through your cupboards and check for ingredients, do you have enough to make something already? I bet you do! Also, try and get cheaper versions of things (though not tea bags, yuk!) and see if you can knock off a few pennies there too.

Chin up, things do get easier