I've got myself into a MASSIVE debt in 9 months...

Pepperoni

weebit wrote: »

As mentioned previously, we're still going to go to Dubai and Cape Town next weekend, but we're going to be more stringent with the money now and spend more time on the beach than in the shopping malls and tourist areas. I'm going to set myself a spending limit and stick to it. I've yet to work this figure out, but I will work something realistic.

Sorry to be negative - but a realistic spending limit would be 0. You don't have the money....

You definitely seem to have had a mini click in your mind but I'm concerned that its not the real deal (i.e. your LBM) and it may be short lived. Please prove me wrong!

Armorica

One option, is to discuss with wife that you can only afford her brother’s wedding IF no car, lodger/downsize…It’s not perfect, but it’s not the worst either. As I’m sure you’re aware, indirect flight via Amsterdam or other options can bring down the price/flexible about when in week you travel. You might want to consider if you can save up points that might give a discount, or focus on entering competitions for cash/flights. Or as someone else hinted at e.g. if you are selling stuff on eBay - save that up for the flights.

Driving isn’t the end of the world. Use public transport. If you absolutely need it, hire a car two or three times a year for a cheap weekend away in the UK.

(I was one of the pennies and pounds ones )

Pepperoni

How are you getting on weebit?

weebit

Pepperoni wrote: »

How are you getting on weebit?

Hi,

I know this question was asked a months ago, but I've just revisited this and thought I'd give an update.

To be honest, paying off of our debt hasn't gone as well as I had hoped, in fact it's only reduced by £1700 since January, I was hoping for at least £5000.

However, we've mainly been saving up cash for a couple of reasons:
1. in February/March 2016, we need to renew my wife's visa to stay in the UK, and this costs £1550 in total, so we decided that we'd save this up in cash rather than rely on credit to pay for it. This is currently sat in an savings account until we need it.
2. Also, because I work freelance, I decided that it would be best if I saved up some cash so that I could continue to pay my rent and bills should I be unemployed for an extended period of time. I now have £1100 in this pot and have been putting away £100 a month and eventually aim to have £2000 there.

This has meant that my overall debt levels haven't changed much, but now that we've saved the money we need for the visa, more money can go onto the debt. In addition, in the past month we've been offered and taken various balance transfer deals, so our monthly interest payments have been reduced by around £170 a month. Also, this past month both me and my wife have had pay increases, mine by the equivalent of £1300 a year, my wife by £2500 a year (before tax). This will really help in paying it off quicker.

All in all, the ground work has been done. We're no longer spending on credit and all our spending is now done in cash or by debit card - a huge shift in our previous spending habits and a big leap forward. My target is to have reduced our debt by £10,000 by Christmas 2016 which may seem like a lot, but I'm aiming big.

dawnybabes

All sounds good, it will be a long haul but if you're both on the same page will be easier.

Fletchasketch

Very pleased to hear that you're moving in the right direction, but your logic as to saving is incredibly flawed. Please read Martin's article about using saving's to pay off debt. It will save ypu hundreds if not thousands in interest payment.

I would also say that given your level of debt that bankruptcy looks like the best solution. I wish you the best of luck with it, whatever you decide to do.

weebit

Fletchasketch wrote: »

Very pleased to hear that you're moving in the right direction, but your logic as to saving is incredibly flawed. Please read Martin's article about using saving's to pay off debt. It will save ypu hundreds if not thousands in interest payment.

I would also say that given your level of debt that bankruptcy looks like the best solution. I wish you the best of luck with it, whatever you decide to do.

I totally disagree. The reason I'm saving cash is because I'm saving for something that can only be bought in cash, or I don't want to run the risk of all my credit cards cancelling my accounts and I don't have access to it anymore.

to confirm, the £1550 it costs for my wife's visa is an essential cost that we have to pay if my wife wants to continue living in the UK, therefore it's very important that we have the money available to pay for it. If I relied on spending this on a credit card, there is a chance that come March 2016 when we apply for the visa, the credit card could be closed, or they'll reduce my credit limit so that we can no longer afford it.

Also, the 2nd savings pot is basically our emergency fund. I work freelance and my contracts usually last anywhere between 4 and 8 months. When one job ends, I have to find another. If I'm unable to find a job for a while, I need to know that I can continue to pay my rent, bills, and crucially pay of my credit cards. If I miss a payment on a credit card with a 0% deal, they'll remove the 0% deal and it'll sky-rocket to the standard rate! These bills cannot be paid by credit card, so again, I need cash available to pay these bills.

I'm not going to post a full SOA, but my rent, bills and minimum payments come to around £2600 a month. We earn around £4000 a month after tax, so the remaining £1400 goes on food, travel and general spending, plus extra payments to the credit cards - I aim for between £200 and £400/month in extra payments. Taking £100/month from this and adding it my ISA isn't a bit deal, plus once my savings pot reaches my target of £2000, I'll stop putting money aside and put that £100/month on the cards instead.

I think this is a totally sensible plan. I know that if I put this money onto a credit card it would reduce interest, but I don't want to run the risk of not being able to pay the bills. We can't live off my wife's earnings alone.

sourcrates

Quite an amazing journey you've been on weebit.


Just read entire thread, your story is a familiar one to me, I've read many similar ones, your still relying on credit, despite been 50 odd grand in debt.


You are barely making a dent in what you owe, and I suspect you may add further borrowing to it yet.


Every one tackles there debts in there own way, so I`m not going to judge your attempts at repayment, but I seriously think you need to curb the spending, as you, so far, seem a long way off rock bottom, as you are still earning money, and still have lines of credit open to you, its when one, or both of those sources are cut off, that panic will set in.


At that point, the realisation of your situation will kick in, no further credit, combined with a possible loss of income, is the nightmare scenario, and it does happen.


I hope you have the aptitude to clear this before that happens.


Good luck.

rogue999

weebit wrote: »

I'm not going to post a full SOA, but my rent, bills and minimum payments come to around £2600 a month. We earn around £4000 a month after tax, so the remaining £1400 goes on food, travel and general spending, plus extra payments to the credit cards - I aim for between £200 and £400/month in extra payments. Taking £100/month from this and adding it my ISA isn't a bit deal, plus once my savings pot reaches my target of £2000, I'll stop putting money aside and put that £100/month on the cards instead.

£1400 on food, travel and general spending is huge. I know travel can be expensive if you are in London (sorry didn't read where you were), but food is an easy one to cut down on - £200 for 2 should be easily enough. So what is the £100's in general spending? I would be breaking that down and doing a full SOA.

I agree having an emergency fund can be very useful though. I only have £500 but am sticking with that and throwing everything else at my balance as am very keen to get rid if it!

koloko

weebit wrote: »

I'm not going to post a full SOA

Had you posted an SOA two years ago, last year, earlier this year and/or just now it would have been easier for you to have benchmarked and tracked your progress.

If you post one now it will be easier in the future