"The best way to get something done is to begin"

Non_compos_mentis

As the title suggest, I am probably the the king of procrastination, I initially thought the New Year would be an ideal time to start afresh. However, I have come to the realisation that I have already delayed taking charge for a very long time. Therefore, I am hoping to seize the day and finally tackle the debts head on.

I have been lurking on MSE for a while and have flickering LBMs. I am convinced this is it and things can only improve, they must - I have far too much to achieve and can ill afford to be accumulating more debt.

This post and the thread is primarily for my benefit. However, if you do wish to comment then please feel free to do so. The deal is something like this: I am in a decent paying job but extremely stressful job with a mountain of debt and need to save for a wedding (including the Rock) and a house deposit. The cold hard numbers are:

Total debt is a shade over £38k broken as follows:

• Natwest Loan -£365 (Last installment 29 Dec 2013)
• Natwest CC 1 -£959 (0% till Feb 2014)
• Barclaycard 2 -£1,448 (0% till May 2014)
• Barclays 1 -£2,520 (OD at 25.9%)
• Natwest CC 2 -£2,618 (0% till April 2014)
• MBNA -£5,261 (£787 0% Nov/14; balance 6.9% LOB)
• Family loan 2 -£5,281 (0%)
• Barclaycard 1 -£7,438 (£6064 6.9% LOB; balance at 18.9%)
• Family loan 1 -£12,120 (0%)
• Total -£38,010

The slightly less bad news is that I take home c£3,100 pm and should have a surplus of £1,350 pm. You are probably thinking "why the debt if there is such a healthy surplus?" It is a valid question, and the answer is that 1) I haven't missed anything from the calculation 2) I have only recently started earning the wage and 3) most importantly, I don't wish to discuss the reasons for the debt or at least not for now. However, I can assure you that I know the reason for it and I have addressed it.

Additional piece of good news is that in recognition of my loyal and dedicated slavery, I am due to be paid a bonus of £3k (net) in December.

If I plod along then I should be debt free by summer 2016 but what's the fun in that? I want to start 2016 debt free! Do I think it is reasonable and doable? I think it will be tough particularly everything is already down to the bear bones. To make it fun, I am setting myself a challenge of:

Pay off £20,140 in in 2014

This roughly works out to be:

Paying off 1% per week

Let me know if you fancy joining the fun.

I have rambled enough for now!

catriona79

Hello and good luck!
You sound like you are determined to complete the challenge! I'll join you if I may in your quest to pay off 1% a week. That's roughly what I pay at the mo, about 4% a month, so if I up it slightly.... Count me in!!!

Non_compos_mentis

Hey Catriona,

Welcome! The more the merrier! I am really determined this time and it will be really good to have someone to motivate, cajole and kick @$$ on the way.

You seem to be doing so well with the savings and paying down of debt, hopefully you will not notice the extra 4% per year!

cottage_retreatist

Hey non compos mentis

Congrats on your light bulb moment and from working out you action plan!!! I have found a goal to be invaluable for keeping up the momentum!!!! I recommend keeping a running total on your signature in one way or another-it has certainly helped me so far! I have a similar aim (to clear 10k in 6 months) so will be watching your progress! 1300 surplus is a great start but I highly recommend posting up your statement of affairs-you can find it in the main debt-free wannabe board-if you post it up we may be able to find an extra few hundred a month to knock that debt down even more!!!!!

Welcome & good luck-you won't find a better bunch of motivators and supporters than on this board!!

C-R x

Non_compos_mentis

Hey CR,

Thanks for stopping by. I will definitely be working towards a goal and keeping track of it here. I might add a signature, we will see how it goes.

I have been toying with the idea of posting a SOA but I will be honest I am not sure it is a good idea at this stage. Helpful as the comments can be, I have learnt that I am better at keeping to a target when I have set myself a realistic and have enough leeway. However, I know why you have suggested it so the high level SAO is as follows:

Income £3,100
Expenses
Rent -£600 (includes all the bills)
Travelcard -£250
Charity -£50
Food -£75
Spending money -£350
Interest and bank charges -£150
Gifts, presents, holiday fund -£100
Phone -£10
Health and fitness -£20
Professional subscriptions -£75
Dental and optician -£20
Haircuts and personal care -£20
Other miscellaneous expenses -£20

Total expenses -£1,740

Surplus £1,360

I can think of 4 possible categories where anyone can suggest cutbacks: 1) Charity 2) Spending money 3) interest costs 4) gifts, presents and holiday fund.

Charity - this is absolute no way this is going to be cut, if anything I am quite ashamed at how low this is. I know there are people who think that its discretionary spend and you should cut it back whilst you are in debt. I am sorry but I don't agree to it.

Spending money - this includes everything for me: clothing, late night dinners cause I work extremely long hours, going out with friends, drinking money, cabs, you name it. As the title suggests its spending money and I am pretty free to do anything with it. I know it may seem to be on the higher side but considering it was quite close to £1k to £1.5k pm not long ago and I live in London, I think it is just about right or might be able to bring it down by £50 or so max.

Gifts, presents and holiday fund - Again one may argue that I can bring this down but as mentioned above I work extremely long hours and in an extremely stressful job so the holiday is an opportunity to get away for me. Holidays typically amount to about £800 - £1k and the remaining is on gifts/presents. I think £200 - £400 isn't excessive given I have two very young niece/nephew (who I absolutely adore), gf and a reasonably large family.

Interest costs - this is definitely something that I have been working on to get this down significantly. It should come down to about a £100 pm now that the very expensive loan is ending and I should not be using the overdraft any more. I am constantly trying to shift the debt to 0% but there aren't any offers available on existing at present (all cards are nearly at the limit) and I have been turned down / have less than 60% chance of getting new cards based on my debt utilisation ratio.

I know I may seem a bit defensive about cutting down and some may question whether I actually am serious about getting debt free but its hard to understand it unless you are in my shoes.

Any suggestions or comments are most welcome!

Non_compos_mentis

Got up super early today, went over the plan again to make sure I have captured everything and whilst it a stretch target, it is actually a realistic target.

One piece of fact that I forgot to mention in the post yesterday was that whilst the two family loans totalling nearly £17.5k need to be paid back, it has been agreed that I will initially save the amount and use it towards a house deposit. I will then repay it over a 3 - 5 year period. It is extremely generous of them considering I have already had the loan for a prolonged period.

That actually means that if I am strict with myself, I can pay off my other debts in 2014 and start saving for the house in 2015! That will be some achievement!

Non_compos_mentis

A week in, thought I would take stock of where I am so far.

I have given myself a spending allowance of £350 plus £100 for gifts, presents and holiday, which works out to be approximately £100 pw. I have spent exactly £100 this week including two major b'days so I think I am on track.

I can't wait till the end of next week, I go away for a prolonged period. Hopefully I won't need to spend much whilst I am away.

Domayne

Hi non compos! I understand where you are coming from about being defensive over certain aspects of your outgoings..after starting my own diary I realised I'm exactly the same, like I save £50 a month for my niece and quite a few people told me to drop that but there's just no way I would! I've found advice is all well and good but you have to decide what's in the best interest of yourself and your family. ..not other people's since not everyone's circumstances are the same
I wish you the best of luck on your debt busting journey and I look forward to seeing how you get on

tightar*e

Hi


we are in a similar position....we also have a good income...did an SOA and discovered we had £2400 a month to pay towards debt!!


I have a £1700 of surplus income....still not sure exactly where that was going....but I know now its going straight off our debt.


My plan is only in its first month but at the moment it is going well. If it works out correctly we should be CC free by June and have saved 17K towards a large loan buy Dec 14.


So totally debt free by April 15.....but I think we can maybe get it earlier depending on bonuses..


The method I use is to pay the money off the debt immediately as it enters the account. Don't carry credit cards with you...then just be disciplined, I personally carry my CC with me as I find having it and still not using it makes me feel stronger...


I also find that as I (hopefully) have budgeted for everything, I still have monthly budgeted spending money (£277)...so if I don't spend all that spending money I keep it in the account as I like the smug face from checking my balance and always seeing it in positive numbers...a lot of people on here pay anything left over at the end off the month off their debt, but as I have such a huge surplus after everything has been paid for I'm using that tick the debt down, it should work for me...it might work for you as you don't feel like your going cold turkey.


Most importantly keep this diary going...even in no one comments on it...I find it keeps the journey real, as it is all too easy to slip back into not checking your bank account or over spending and not being accountable for it...


If you over spend, write it here....then its out in the open and you can learn from it..if you don't you'll just pretend it didn't happen and before long you be turning the light out..


Sorry for the long post...I have just learnt so much from the last few weeks of really paying the debt off.

Non_compos_mentis

Domayne and TA,

Thank you so much for stopping by and commenting.

It is always comforting when someone understands where you are coming from.

Your posts, comments and advice has been most useful and I will be trying to incorporate them in my debt busting mission.

I will certainly be using this diary to be holding myself accountable on a weekly/monthly basis. This diary is for my benefit and if someone comments along the way or wishes to join me in the challenges then that is a bonus.

NCM

Non_compos_mentis

Bit of a rough day on non-money front. The long term gf wants to take a break. The break will either make the relationship stronger or it will be the end of the road. My general view about breaks is that the relationship is on its last legs.

It wasn't long ago that we were discussing wedding, a house etc. It is what it is.

I know this has nothing to do with my debt journey per se but just had to get it off my chest!