2014 Debt Busting - 37.4% clear

elfy1807

Hi.
Just popping in to say wow on the debt busting in just a short amount of time.

I know how you feel about being frustrated. I like to have everything done right now.
But it takes time.
I think my problem is that I look into the future too often to see where I could be rather than looking at now to see where I am and how far I've come.

The money you're paying... is that just the minimum payments to each of the debts? Or are you overpaying too?
If it's just the minimum and have the cash available to overpay/you're overpaying on all/most of them, can I suggest just overpaying on one? Say the smallest one (according to your current sig, that's your rent arrears).
Then that one would disappear quicker and be another strikethrough on your signature. Then work on your next lowest (currently Eon) using the Rent payment as well as the overpayment amount.

It's a form of snowballing.
From what I understand, the snowball effect suggests that you target the one with the highest interest rate first so you don't pay as much interest, but I know many people prefer to tackle the smaller ones first so it looks like you're actually getting somewhere by knocking off the amount of creditors you have.

Another possible idea to keep motivation is the 1% challenge.
Draw a 10x10 grid and split each total up into 100 x 1% and each time you pay off the 1% amount, colour 1 square.
You could do it two ways... split the total amount in 100 or split the remaining debt into 100

For example - your rent arrears could be £2385 split into 1% of £23.85 and you'd currently be at 93% there.
Or you could split the remaining £150 into 1% of £15 and for each £15 you pay, you colour a square.

I know many people find motivation by checking little goals like that off.

Don't feel like you have nothing to show for it.
As you said, you've already had the life, but the numbers in your signature are a huge thing to show for the hard work you're currently doing.

When you're all paid off you'll be able to start putting all that hard earned money into savings accounts and then you'll be able to see what you've got from the hard work.

Good luck!!

mr2jay

Hi, thanks for the words of encouragement

The payments I am making are based on taking a wider view and looking at who is shouting the loudest - for example, the personal debts are taking a back seat until everything else is either caught up or paid off. The car payments I am making are the minimum payments each month (although I would love to clear that off completely meaning the car is actually ours rather than technically belonging to someone else until it is paid off). The credit card we are making the minimum payments + 20%.

The rent arrears are the hardest one to clear off, I am over paying considerably on that until I am back on track - the Landlord is very understanding - this only happened when I lost my job just before Christmas Unfortunately, making sure we have a roof over our heads is probably the most important thing.

Looking through this, I should have another dash in the spreadsheet in a couple of weeks, which will be a boost mentally.

I think my main problem is how this is grinding me down a bit. I work 45 hours a week and spend an extra 4 hours a day travelling to and from work. All in all, it's mentally exhausting.

We'll keep our heads though despite the temptation to have a bit of a blow out. I just need to clear the bills element of what we owe I think (Eon, Council Tax and Rent). Once they are gone, then that will mean that I can focus fully on the credit side of things and clear that.

It's a long road with plenty of distraction along the way after all

BILLIE

Hi Mr2Jay - please don't feel despondent having £300 per week to pay off debts is a wonderful amount and some of us are very enviable of that.

I agree with elfy in that making minimum payments on most but larger payments on individual debts will, hopefully, see one debt fall quicker.

Also as much as I hate paying Council Tax/Energy etc these are a fact of life and you may find depressing by adding these to your debts, unless they are arrears, as they will never go away - unless you pay up front!

However, all that said GOOD LUCK, keep at it and you are going to get there because you dent it ever week as opposed to me monthly and with a lower surplus!!

mr2jay

Hi Billie

Trust me, that £300 comes at a price. I admit some people may be jealous of that amount but 13 hours a day away from the house working or travelling is a real sacrifice to achieve this. I don't mean to sound curt, sarcastic, offended or anything like that because this is the choice I am making due to our situation. Truth is that I am working as hard as I possibly can to get through this.

Unfortunately, the way we think in our house is that as soon as a bill comes in, we owe that money. In effect, the minute it falls onto the mat, it's a debt. Now, what we try and do from there is clear them as quickly as possible before switching to the credit bills. I know that it probably makes it an uphill struggle...

However, the council tax for example? Once that is paid, it is paid for the year meaning that we know that once it is paid, we can use the difference on overpaying credit bills without getting a nasty shock . Likewise with the water and energy, they come in each quarter, clear them as quickly as possible and again, switch the difference to credit balances.

At the moment, I refuse to do anything by direct debit so I can keep full control of everything. I get paid every Friday, refer back to my spreadsheet and pay directly from the account what I can afford that week....

The overall plan, if I can get there, is to clear the credit balances then save enough to clear next year's council tax in one hit when it comes in meaning we have a full 12 months of not worrying about that one.

Hantsman

BILLY and Elfy are right, you have done an awesome job so far. The thing to bear in mind as well is that even though it feels hopeless sometimes, the more you are paying off, the less interest you will be accruing and so the faster the remainder will fall.

I would also take a moment every now and again to have a look at how many views this thread has got since you started. People just beginning to tackle their own finances will look and see you have paid off over a 3rd of your debts and realise that it won't be easy but they can too

KEEP IT UP!

BILLIE

Don't get me wrong think you doing an amazing job, but some of us also have long days and are unable to earn as much. All the debt free journeys are a struggle and we all dream of getting there. Well done for paying bills up front. Keep at it, it will be worth it. X

in_need_of_direction

You're still on track to end this year debt free. That's something to be proud of. We all hit a slump from time to time. Just focus on what you've achieved and stick with it.

mr2jay

Today is a day of 2 halves....

On the plus side, it's a good week for paying things off as I have cleared another £417.26 spread across several bills....

The down side is that there is yet another month rent due as of next week so added it to the totals. So, despite a good week paying off, my balance has fallen backwards due to another £795 due next week.

A bit depressing but looking at the bigger picture, I am starting to now get to the point where I am actually catching up with the rent

mr2jay

OK, I have just been through my figures and made a startling discovery.

Even with the additional bills coming in (rent which I am catching up with, energy bills, credit card interest and all the other stuff like mobile phones and home phone/internet etc), I am still reducing my debt by 10% a month.....

I have had the council tax for the year through now so that isn't going to get any bigger, the winter months have now been dealt with on the energy bills which means that by rights I have about 60% left to clear off which should mean that I SHOULD be clear in about 7 months!!!

That is certainly something to be proud of

mr2jay

Also just changed the title of this thread as a running percentage....

Call it a psychological boost - for example, despite an extra large bill being added, I have still cleared another 1.5% of the total.....

So, despite the numbers going up, the remaining balance as a percentage has gone down. That helps