Driving Down Debt

ThatKiss

Whoopsy! Been a while since I've been on here going by my last signature update, and I really should have been back in that time because I made great progress through 2014!

...And then got a couple of kicks in the teeth at the end of the year that have left me back in a worse state than my last update in May last year.

Long story short, one of the cars - The Tank - needed a hefty amount of repairs for it's MOT late in the year. Nothing overly serious, but it mounted up to be a hefty bill.

And then, BANG. The car died just six weeks later. Painful enough, but it also meant the cash I'd set aside to get The Classic into tip-top shape was redirected into a new car. Ouch.

So, notwithstanding the finance on a replacement, I'm now back to where I was in January last year, owing £6k to Barclaycard.

Time to take stock.

With the new car, I don't have MOTs or servicing to worry about (thanks to a deal the previous owner had taken out when they bought it) so there are cost savings there, and insurance is cheaper than on the old car.

I've reviewed my outgoings today and have closed off an unused credit card account, and a savings account I don't use as well.

I've removed movies from my Sky package since I tend not to watch them, and have identified a couple more areas for cost savings that can't be closed off straight away but will within the next couple of months.

Payments on the new car mean I've halved my credit card payments for the moment, but ideally I'd like to boost that back to the previous level and perhaps find another £100 a month to put towards payments.

I have a fairly decent wedge after my set monthly outgoings so should be able to do this.

I think over the next nine months (until the end of the year), it would be fair to aim for:

• credit card debt to be at most £3000, preferably lower
• some level of savings accumulated to allow The Classic to get the work it needs done (It's MOT'd for this year, and this work should prevent any further major spend over the next five or six years).

It's not a huge list, but by my estimations this would be around £5k of savings over the next 9 month, which might be a touch more challenging!

I'll try to behave and check in more often :rotfl::rotfl:

ThatKiss

*wanders in, brushes away a couple of cobwebs, clears dust from the windows*

Phwoar, a bit abandoned-looking around here! Must remember to come back a bit more regularly...

How we all doing?

I've not dropped in for a while, so a quick catch-up since my last post.

• New car going well, no problems at all, and enjoying the free servicing/MOT-free lifestyle
• The Classic made it out and about for a while this year, but is now off the road until further notice. Booo!
• Down to the £5k mark on the cards again, and a growing savings pot (though not growing quick enough for my liking!)
• Realised that a small investment I made a couple of years ago has had a 500% ROI. Hoping it'll continue to grow, so not cashing in just yet...

I don't think I mentioned that I'm not counting the new car finance towards debts as far as this thread goes, as it's a going concern. I'm only counting, at the moment, the ones that seem to have been around forever.

That's about it really, other than having to decide whether the savings pot goes towards the originally-intended Classic restoration, paying a lump sum off the credit card (interest-free until Feb), paying a lump sum off the new car (not interest-free!) or putting it towards a likely upcoming change of accomodation circumstance (eep!).

For the moment, it can stay in me savings account until a decision is either made or forced!

ThatKiss

So a little change of behaviour I've decided to make.

I manage to get around 5 hours a month overtime at work, and also have a small second income.

Until now these have both gone straight into my current account and any leftovers in the account at the end of the month get sloshed into a savings account.

I've now set up a second savings account for debt busting, and will pay anything from the second income directly into this account. Any overtime at the full time job will go into the larger pot to try to grow this, and I'll split any spare cash at the end of the month between the two accounts.

The plan is that whenever the debt-busting pot reaches £500, I'll pay that off the credit card. Once the card is paid off, I'll direct those payments towards the car finance.

I'm hoping to also raise my direct debit to the credit card by £50. I don't think I'll miss this in the short term, and it'll effectively be speculating to accumulate - the sooner the card (and car finance) are gone, the sooner I free that monthly spend up to go into savings instead!

ThatKiss

Another little change - the new savings account has a slightly higher rate of interest than the existing one - so I've relabelled the two and moved the larger balance into the higher interest account. It won't, in all likelihood, make a vast difference, but better in my pocket than the banks!

EDIT: Did the maths, like the result

ThatKiss

Back again! Reading other peoples's diaries has such an effect in making me want to cut my own debt, it's really inspiring! I find myself looking at accounts and thinking "I could just pay £xxx now and then I've no choice, it's done".

Must resolve to at least read, if not post, on a daily basis.

ThatKiss

Another little boost when I spotted the news on MSE homepage that the interest on students loans is dropping to 0.9%.

I've not counted the remainder of my student loan towards my aims in this thread as I'm well on board with Martin's advice not to pay it back ahead of time, but seeing the values my current salary sees deducted towards payments is definitely starting to make me want to free up those funds.

Depending on my circumstances as time progresses, I'd quite like to target this after the credit card and car finance are gone in order to continue the DFW mindset and free up those funds.

Incidentally, how frustrating is the SLC repayment website? PAYE payments only update once a year, so while you can use the balance calculator to get a current balance, the headline figure shown is currently 18 months out of date. Poor!

ThatKiss

Just a quick update - this has been a low spend week so far. That'll change at the weekend as I'm off to some car racing, and have to travel a fair distance. Normally I'd head off on Saturday and stay with a friend, but he's not sure he can do the racing due to a family illness, so looks like it's just a day trip for me.

Not looking forward to the 6am alarm call for that one

On the bright side, looks like I'll have a few hundred ££ left in the bank when payday comes around, to split between the savings pots, which is a nice boost!

Also spent a bit of time decluttering earlier in the week, and got rid of a heap of old clothes and general junk. It still looks like there's masses of crap to go through, so I'm hoping to get rid of that next week when I have some time off work.

This is my last full week at work until the middle of October, as I have a heap of weekends away and one-off events coming up, including a stag doo and a wedding. Cripes!

ThatKiss

Dress down day at work today, and as I put my jeans on this morning I found a fiver in my pocket. Paid for lunch, woot!

ThatKiss

Payslip for this month appeared today, so I was able to amend my student loan calculation to take account of this month's payment, albeit the payment isn't actually made until next week.It's so frustrating having the figures shown on the site 18 months behind, and having to keep on top of the payments saved in the balance calculator each month!

Still, onwards and upwards!

ThatKiss

Turns out the student loan payment is made this week. I hadn't realised it was a bank holiday weekend, so pay went in today rather than Monday!

Had the expected chunk left in my bank account, so split it between The Fund and the debt busting savings account. £200 to each is decent!

I think I mentioned previously that the aim is to get the balance on the debt busting account up to £500 and then pay that as an additional payment to the credit card. More than halfway to the first payment now!

September is going to be expensive, as I have two weekends away and another overnight stay, so I may need to pull some cash back in from the debt busting account, but I'll try to avoid that if possible.

I've already saved cash by only having one credit card to make a payment on, so hopefully that's a good start! Plus one of the city breaks is to the eurozone and everything on that has been paid up front, and I have some spending money left over from my last trip :-)