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

Fletchasketch

Is the Halifax up to the overdraft limit? It almost sounds like it's worth chucking your spare money to the 1520 debt at 19.9% ad if anything, increasing rather than decreasing the Halifax debts to pay the there's debts, Given that the max charge is only ever going to be £31 a month.

weebit

Fletchasketch wrote: »

Is the Halifax up to the overdraft limit? It almost sounds like it's worth chucking your spare money to the 1520 debt at 19.9% ad if anything, increasing rather than decreasing the Halifax debts to pay the there's debts, Given that the max charge is only ever going to be £31 a month.

The OD has a limit of £2,250, but after £2,000, the charge increases to £2/day. So since my balance is £1,970, I'm basically, I am at the limit on the OD.

But as mentioned, it'd be £70 cheaper for me to pay off the OD next. Another factor in wanting to pay this off asap is that the bank can call in the balance without any notice so I want to remove that risk (despite the fact that I've had this OD limit since I was a student about 9 or 10 years ago!)

5erge

Good job chipping £500 off your debt, another £500 next month?

Des

Teacher2

Paying back? Brilliant! Keep at it!

JustAboutThere

weebit wrote: »

It's not simple to become a British Citizen. She needs to have lived in the UK for 5 years before this happens. When she was first granted her visa to live in the UK as my spouse, the visa lasted for 2.5 years. after 2.5 years, we have to renew for another 2.5 years (this is the stage we're at). After this next visa ends, then she can become Naturalised (aka given indefinite leave to remain status) and be eligible to sit the citizenship test. If she passes, she's eligible to apply for a British Passport.

I've just come across your thread.

Question - Are you a British Citizen? Because if you are and as long as I'm remembering and reading it correctly, a spouse of a British Citizen only needs to wait 3 years before they can begin their application for Naturalisation.

https://www.gov.uk/becoming-a-british-citizen/if-your-spouse-is-a-british-citizen

Good luck with your efforts.

Honeylife

The rent a roomTax free allowance will be increased in April 2016 to £7500. per annum, a far more realistic sum. Remember you can spread this how you want within 12 months. Either 7500 for one month or 7500 for 6 months or 12 months
If you have rented the spare room for the past few months I am you sure will not have exceeded the current allowance by April 2016.
Being a Live In Landlord LIL, has its hidden costs read everything absolutely everything you can on Spareroom.co.uk It has loads of helpful hints and theaccidentallandlady.com
My spareroom got me out of debt (not as muh as your but it was keeping me awake) and I am utterly thankful.
Congrats on all you have done to get yourself out of debt and your YNAB is my new mantra.:)

FinallyGettingFree

How is it going, Weebit?

weebit

Things are going very well actually. Current debt stands at £48,928.80, this is £1383.20 less than when I re-started paying it off. It sounds good, but I'm actually about £500 behind my target. I'm not disheartened though because it's still a good start. The last time my debt was at this level was July 2014, which means I paid off 18 months of accrued debt in just 2 months!

Also, I have now rented out the spare room to a friend of ours! He's moving in this weekend and has already paid his first months' rent. @Honeylife: Thanks for the heads-up on the tax-free limit, that was something I was not aware of. So from next month, my debt should start decreasing quicker than in the past few months.

YNAB has to be the biggest single factor in helping me do this (other than my own determination to do it right this time!). It really has helped us keep track of what we're spending and changed my attitude towards money.

I'm really excited about the months ahead. Once we reach £40,000, I think we'll treat ourselves to a nice bottle of bubbly (aka cheap Prosecco from Lidl!)

Teacher2

YNAB has to be the biggest single factor in helping me do this (other than my own determination to do it right this time!). It really has helped us keep track of what we're spending and changed my attitude towards money.

I'm really excited about the months ahead. Once we reach £40,000, I think we'll treat ourselves to a nice bottle of bubbly (aka cheap Prosecco from Lidl!)[/QUOTE]


Brilliant! Well done and keep at it. I think you have got the moneysaving bug on board now. Have a look at the 'Mortgage Free' threads to see how others ex-ed their debts. Posters have to include a 'Pearl of Wisdom' piece of advice and they are very clever and useful. Distilling their comments I would say that the following traits are common for money savers and those who want to pay off their debts:-

-focussed
-well informed about exactly how much money the saver has at any one time (i.e. nothing ever drifts)
-resilient (doesn't give up after a set back but starts again)
-prioritises paying back debt over everything else including having fun or buying stuff. Especially buying stuff!
-has the other partner on board for encouragement & ideas
-gets 'bang for their buck' in daily spending

Good luck!

lovehackney

Just found your thread and read it all the way through... wow, quite a journey you've been on! I wish you best of luck for the future. I did want to share a personal anecdote however (which I also shared on the dairy name "Dairy of Reinventing Ourselves" or something like that) as I believe it is relevant for you.

In your last few posts you've mentioned earning more and so paying your debt down faster. Obviously in theory this is a good idea, but I'm concerned that as you earn more, you'll think you 'deserve more' - your wife especially!! - and spend more. A thought process that goes like "Oh well we have another £200/month now, so can afford to spend another £50 on gigs / going out / whatever..."; "oh well let's celebrate the pay rise with a weekend away..".. and before you know it, you've eaten up the whole payrise.

As an example, 5 years ago I left university with about £3k debt (credit card and overdraft, not including my student loan). My first job was well paid for a graduate (£32k) but I was living in London and it was expensive. I needed clothes to look the part and well, clothes cost money! 2 years later I moved jobs and got a big pay rise (salary of over £50k).. well wouldn't it be nice to go on holiday this year! To treat my parents to lunch at a michelin starred restaurant! To move flats and live on my own - after all, I can afford the rent now. Before I knew it, my debt was at £5k. A year later, my salary went up to £60k. And then £80k. And you know what - I still have £4-5k of debt. Because each time I bought something or upgraded my lifestyle. My clothes got more expensive, my dinners out got more expensive, drinks with friends - I'd buy a more expensive bottle of wine etc.

Now, in this time, I've been fortunate enough to buy a flat (with my boyfriend, and through his judicious saving and an inheritance). We have a combined income of over £140k, and £10k of debt between us. Yes it's manageable, I don't struggle to pay (significantly) more than the minimum payments. But the reason it hasn't been paid off? Because I wasn't tracking my spending. I didn't know what I could afford. I'd pay off over £1000 on pay day.. only to respend £1000 by next payday. All those small purchases added up. Since beginning of January, I've been logging EVERY spend. I didn't realise I spent nearly £300/month on groceries (for one!!) - but now I know I do, I know where to cut back. I have a spreadsheet on my phone which I update immediately after any purchase, and check my bank accounts daily to check DDs etc. It's made a significant difference to my debt and budgeting (I know it's still early days) but no real difference to my life. Now I can clearly see the trade offs - I had to spend £5 on an eye test today, so thats £5 less on socialising this month.

I don't want to come across all preach-y (and I've rambled enough), but I can't stress enough that it's all about how much you SPEND not how much you EARN (unless you earn zero of course). Getting a payrise or a lodger will really help you out - but this money MUST be directed towards your debt. No 'one-off' treats because it's the first month with more money. Even your celebratory prosecco needs to come out of your grocery budget!