Maryandal Debt Free Mission!

maryandal

Hi All,

This is something that I have been meaning to do for sometime but then something else has always popped up and I think, do you know what I REALLY fancy that pub lunch or I can't be bothered to cook tonight, lets get a take-away!

Our debts have come for many reasons, chiefly living and working in two different areas and just loading the money onto a credit card and Mary finding her calling and doing a second degree (this one job-focused rather than the first one which did not lead to a job!)

We were lucky, the second degree did not attract any tuition fees as they were covered by the NHS but it did mean Mary wasn't able to work for the three years she was studying!

Our debts are as follows

Lloyds overdraft £958.16 (needs to be zero by July 2014!)
Barclaycard Credit Card £7754.75 (6.9% life of balance)
Natwest Credit Card £2266 (0% till 01/06/2014)
Virgin Credit Card pt1 £1174.22 (0% till 16/06/2014)
Virgin Credit Card pt2 £945 (0% till 16/9/2014)
MBNA Credit card £922 (0% till 06/02/2014)
Fluid Credit Card £4694.76 (0% till 20/09/2015)

By my maths (not always the best) this is a total of
£18716!

We were fortunate enough to buy a house in 2007 although it dropped into negative equity when the financial collapse happened! Although when Mary got a job we had to move quickly so we now are accidental landlords as well. Luckily we have some lovely tennants who pay on time each month.

On the plus side we have sat down and worked out where our money goes, the essentials (and little luxuries that we do enjoy), the amount we get in and we are positive! (that was a relief)

After paying everything out we SHOULD be +£921 per month (including the rental income) £467 if I don't take into account the rent.

We have done a budget (something we have never done properly before) and given ourselves "spending money" each of about £150 per month. If we stick to this we should be able to end each month with £250 plus the rent (we are trying to build up a pot equal to two months rent in case we need to find new tennants/have an emergency).

We have structured our payments on the credit cards to allow us to pay off the highest first, although we have now just realised the overdraft has to be paid by July or it is no longer interest free so that will become our focus.

By our calculations we will be debt-free by April 2017. This seems an awfully long way away so we are going to do everything in our power to reduce the time it takes.

I hope to post regularly on here to update our progress and hope that the added support of the DFW boards provides will help us along,

Here we go!

Al

heyjude2013

Hello,

Welcome to your new diary!

The one thing I would say - you mention you SHOULD have that 'leftover' money, but you way it reads, you seem to imply you don't have it? i.e. its being spent somewhere? I would recommend starting a spending diary too, where you track every last penny and work out where that £921 is going!

Other than that, sounds like you have a plan!

Good luck!
xx

maryandal

Hi HeyJude,

Thank-you for your response

Up until now we "should" have had the £921 left over but it always went on "stuff" the budget we have set ourselves is achievable without being too crazy on our lifestyle. We have a joint account which, up until now, has been the spending account for both of us. We have seperate out our accounts again and aim to put £100 each in the accounts for "stuff" (going out, meals at work, clothes etc) This month I got a bonus so we edged the amounts up a little!

We both want to see at the end of January how much is left in the joint account (this date is selected as we both get paid before Christmas and then again at the end of Jan so extra budgeting is required!) And any extra will go on the cards.

Food and holidays have been our main vices up to this point, we have decided to try and curb this by having a food diary and planning in advance, buying online and then collecting, this has helped to reduce the amount we spend on our biggest controllable bill!

We have both the santander 1-2-3 credit card and the 1-2-3 current account. After the monthly charges we make around £7 or so which is nice as it is all stuff we would have bought anyway so why not get a little extra back. I am very aware though that 1% of £1 is 1p and 100% of £1 you didn't spend is £1, a saving of 99p!

The one thing I haven't taken into account and that I am very aware of are things like car tax, car insurance, mots, (all three of them occurred last month!!!!!) I will need to work out approx costs of these and put something aside to cover such things.

It has taken a long time to get here but we will get debt free!

Any tips (especially on enhancing the money in side of the equation) would be greatly appreciated, I have a reasonable amount of free time as my working week is squeezed in to 4 days or so.

Al

maryandal

p.s I'm confident I have seen a glossary of terms used on the site but I can't seem to find it, If anyone can point me in the direction of it I would appreciate it!

Al