Are we really in debt? YES WE ARE

themaccas

Hi tolip
I've been reading your posting with a lot of interest, it sounds like you have made a great start in organising you debts. we felt we had an unsurmountable amount of debt in jan 06 but have now managed to seriously reduce it. It really can be done, I got my oh on board from the start and it has been a real journey, emotionally and financially in fact we have had more savings in the past year than at anytime of our marriage. There is no quick fix though to clearing debts though and it does take commitment, I think you have been given excellent advice regarding DFW burnout, we had that last year. You must stay on here, the support and advice you will get will push you through the times when you want to give up,the cyber cheers you recieve when you pay off a credit card is a real boost!!!!
hugs
x

tolip

Hi everyone

themaccas, your post gives me hope that a year down the line, like you, that we should be seeing results. The burnout is a concern, we need not to make too make big changes too soon. I get paid a good salary, to start with is a matter of managing that money better, not squantering it on thing we really have no need for.

On closer inspection of our accounts, we subscribe to magazines, they arrive and generally a few months later i find them still in their posting wrapper! I did not give it a second thought before, but I cancelled them today, so things like that to start with.

nearlyrich, we hope that when this debt is cleared that we will be more wise with our money, maybe then double our mortgage payment, and enjoy life.

In the last 3 days I have cancelled old bank accounts, cancelled rubbish credit cards that I had, and I had loads of cards from Amex to Barclaycard and everything in the middle. We now only have cards that contain LOB rates, once we 'snowball' the card we will cancel it.

I have run the snowball calc loads of times, It took me ages to confirm with companies APR, min payment (with MBNA is weird how they calc it !) accurate outstanding balances etc etc. But today we have a model to work to.

We are placing £100k into the snowball, we have completed a monthly budget, which is reasonable and allows for contingency fund, etc etc. I have not included bonuses from work, when these come we intend to just pay them off the debt.

With our plan we should be able to clear the debt in just over 3 1/2 years.

We will need to keep our chin up because the first debt is paid off in 4 months, then its a long haul until the next one, 18 months in fact, but then a few tumble quiet quickly.

My wife has been running the spending diary and updates me nightly, it feels weird, we never though we would be recording every detail of spending, but we are. Have not been to bank machine for nearly a week now ! trying to stay away from it !

Off to work now, will update you all in a few days, your comments are appreciated, in fact it spurs us on when we read the comments.

One final question, has anyone else here had £100k of debt like us and managed to clear it all?

themaccas

Hi tolip, I think there was a '100k debt club' or something like that, if you put in a search you may find it. You have made a good start and are being realistic, something we didn't really do. I mean I have been beating myself up for the last month as our debt should be £1400 less than it is, sometimes you just need to stand back and see how far you've come.
Please get your wife to come on here too we can give her support too, it sounds like you are a great team in this.

hypno06

Hi tolip, good moves so far. Keep going but take it steady. Keep posting and getting support, in return you will be able to help others along on their journey.

As for the size of the debt, see my signature. There are a few of us, all more or less in control and setting our own little challenges to get us through.

Some days are easy, some bloody awful, but as long as the general trend is for the debt to be going down, we are doing ok.

Spend-a-holic

Hi Tolip

That isnt looking bad, 3 1/2 years. Good luck, you are making great inroad.

Ps on a separate not does anyone know how I subscribe to this thread???

whatatwit

Spend-a-holic, it's in the 'thread tools' at the top of the thread.

Seaxwyn

HI tolip

I don't know if you heard from any pilots, but just wanted to say I know a pilot. He flies for one of the big well-known airlines. I don't know anything about his finances but have noticed that he drives a small, old and battered car. He has three children and his wife works in quite a well paid job too. I'm sure if you asked around your colleagues you would find you are not the only one with money woes.

InTheRed

Hi, not sure if this is an option for your "snowballing exerise"
Today I have phoned my mortgage company and agreed a 3 month payment holiday.
I have designed a spreadsheet to track the snowball effect of paying of unsecured credit card debt, and for the first 3 months my mortgage payment will be used on top of minimum/most I can afford to pay, payments.
This way I reduce my chances of paying my CC's of from 21 months down to 12. (Self control in place!!! )
The mortgage will start again in October, with slightly higher repayments of interest over the 3 month term, but nothing like interest on CC's!
Also will be using amount which was paying car loan 1 to snowball.

Must resist the urge to holiday in the summer.

Verbatim

Hi in the red,

Interesting post . Can I ask whether the mortgage interest increase is just for a few months or for the life of the mortgage? Have you had to increase the amount of capital borrowed?

tolip

Hi All

Been away for a few days.

We looked at the mortgage holiday, have not ruled it out, been offered 6 months. We never had one before. My understanding is that the increase interest is for life of mortgage, but stand to be corrected !

Well, how have we got on...

As a couple we are getting on better than ever, all we talk about to ideas about reducing the debt over and above our snowball.

My wife has cleared all the old stuff we dont use and is going to a car boot sale next week. We have not been to the cash machine anywhere near like we used to.

The hardest bit I have found is the shopping. I am still in prior to DFW mode ! I still want to over purchase and buy loads of things we dont actually need! but wife is on hand to reel me in! The budget is great, for the first time we actually tailor or shopping to a set amount, where before we just bought and bought and whatever the till said then we paid and though WOW that was a big bill!

The daily diary is great to give us an idea on our overall weekly / monthly budget, hope wife does not get DFW burnout on it.

I can honestly say without the somments and help from the people posting here we would have taken the easy way out and remortgaged the house, we are both so glad we did not.

Some once asked in previous post had i been in contact with any other pilots, no I havent. Aviation is a strange industry, and a very very small one, and its no surprise I have had no contact from anyone. But debt is debt and it doesnt matter how must you owe, you still owe it. The size of our debt is a result of our earnings, its always the way the more you earn the more you spend.

Enough waffle from me, its a big thanks to ALL of you.

I will keep the post going from time to time and keep you updated, big milestome will be our first snowball on 1st June !