Scrimping behind the scenes - with debt of £31,000!

Seasidegal58

So – after lurking on the DFW and Debt Free Diary boards for some time and reading about all the fantastic journeys people have made in hammering down their debts, I have decided to start my own diary to encourage me on my debt free journey and to help keep me on track.

My debt is currently a horrendous £31,111 caused by years of spending indiscriminately on holidays, clothes, home, gifts for family and friends and just basically enjoying Life if I am honest. I’ve ignored the steadily rising amount, gaily jumping from one 0% card to another until all of sudden the elephant in the room that I have been maniacally dodging around has suddenly had enough, charged and propelled me into the corner and refused to let me pass until I acknowledge the seriousness of the situation! In other words, the credit cards companies have pulled the rug from under me and replied with a resounding NO to my attempts in applying for more 0% cards.

I have always been pretty awful with money, but I have only myself to blame as, unlike others on the forum who have families who are dependent on them or are struggling on low incomes, I have only myself to look after and have quite a good job.


However, I am now in my 50s and retirement is approaching so it has become apparent that I now really have to change my ways.

The credit card refusal came at the beginning of the year and so I had what I would call a “flickering” LBM whereby on 25th January the debt actually stood at £33,004! Since then I have managed to reduce it to £31,111 (a credit card CPP compensation payment of £270 recently received was thrown at this to help!). However, I was still fudging around in respect of the rest of what I was spending so I downloaded a free spending app and for the past month have been recording my spending to make sense of it all – which was quite horrifying when going through it all today.

And so, this Easter Bank Holiday 2014 is going to be the start of my LBM proper.

However………………… the other major thing is that my family and friends have no idea about the size of my debt and for various reasons (worrying them, pride, shame, etc) I don’t wish them to know. So therefore I will be hitting my debt, but also try not to alert them to the fact that I will be scrimping behind the scenes - this could become interesting!

I will be working out things over the next few days and recording the various outcomes. I will log back in later with the first thrilling instalment, namely “Debt and Savings” ……………….!

Chrysalis1976

Good luck with your journey

C x

in_need_of_direction

Best of luck. It is doable while not broadcasting what's happening.

Seasidegal58

Following on from my previous post, I’m listing below my current savings and debt positions as at today :

• Savings – Bit of an oddity when you compare with the title of my thread, but having been impressed by reading Dave Ramsey at the beginning of the year, I decided that having an easy withdrawal account kept purely for emergencies (funded before you attempted your debt) was a very good idea. Being American, he suggested $1,000, so I now have a Cash ISA with just over £1,000 deposited. I funded this by way of my agreed overdraft (which will have die-hard DFWs screaming with horror, I know!). But… psychologically it works for me just in case the washing machine blows up etc.
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• Bank Overdraft – I have an old style O/D bank account, i.e. it is agreed and has no fee, but 18.9% on any debt. The O/D has gone up and down over the years from nil to just under the full agreed £4,000, and before it was cleared it stood at c.£1,400. Seeing it was harnessed to my current account, I became worried that my bank could withdraw it at any time as they do not offer this particular type of current account anymore. I therefore paid it via my existing MBNA credit card who offered a 6.9% cash transfer into the current account. So at least it’s gone and I vow it’s never coming back!
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• Credit Card Debt – Oh dear, now we get to the big guns! The big £31,113 elephant in the room (he’s a big’un – African variety with tusks!). Basically as at today’s date this is made up of (and apologies for the formatting):

• Santander Card 1: £918.15 @ 21.90%
  Santander Card 2: £1,173.44 @ 0% till 31/10/14 then 21%
  Halifax: £5.611.75 @ 21.9%
  Marks & Spencer: £4,771.26 @18.6%
  MBNA CC1: £2,187.13 - @ 10.9% till 3/9/14 then 20.9%
  MBNA CC2: £ 3,114.93 @ 10.9% till 3/9/14 then 16.7
  MBNA CC3: £1,509.16: @ 10.9% till 3/3/15 then 20.9%
  MBNA CC4 £1,653.28 @ 10.9% till 3/3/15 then 16.7%
  NatWest: £3,619.47 @ 0% till 21/5/14 then 16.9%
  Barclaycard CC1: £248.05 @ 6.9% till 1/2/15 then 17.9%
  Barclaycard CC2 - £891.47 @ 0% till 1/11/14 then 17.9%
  Barclaycard: £5,415.90 - @0% till 28/12/14 then 17.9%
  Total: £31,113.99
  ·
  
  So I am paying off the Santander CC1 first and then will move on to the Halifax. I aim to throw £1,000 monthly at the debt (this includes the minimums) and my next payment to the Santander card will be around the £400 mark (which includes the month’s minimum of £47). I have made a snowball calculation (or more like an ice-cube at the moment!) which has told me that I will be debt free in 35 months. However, obviously things will move around as various cards come off their promotional rate and I will have to be more strict. I’m up to the hilt on most of the cards – I’ve got some leeway on the Santander and Barclaycard but they are not offering any promotions at the moment.
  
  It was interesting in that I saw an advertisement by NatWest a couple of weeks ago whereby they were announcing that they were ending all 0% balance transfers. So I assume other providers will follow now that the economy is improving.

• Mortgage – Last but not least something more positive. My mortgage debt is only just over £2,500 at an extremely low rate and will finish in March 2016!

So that is my debt and savings situation. It’s late now and I’m off to bed.

Will be looking at my necessary outgoings tomorrow.

Oh and the last happy note – it was a NSD today!

Seasidegal58

....and a belated thank you to Chrysalis and In need of directorn for reading and posting their kind comments. I look forward to reading your diaries on your own journeys.

tootallulah

Good luck, you have made a great start and are clearly well organised, you can do it. 36 payments will go quickly especially when you see cards closing down.

tootallulah

Also perhaps if you get the number of cards down and closed in the next year you might get a deal to help with the next phase looking at your list you do have a real opportunity to get down to far fewer cards.

in_need_of_direction

I agree with toots. I think it's as much about killing off the number of cards as it is the debt. Have you thought of doing an soa as lots of people on here are very good at seeing potential reductions in outgoings that you may be oblivious to.

Pippilongstocking

Good morning - happy diary and goodluck!

Some great advice up there. An SOA would really help even if it just makes you think - but if you're brave enough to post it folks will really help you like they helped me!

You'll get there its a great place - I started off with over £35k a while back.

Hugs, good lucks and deep breathes will get you through it all.

Some fantastic folks on here who will be so awesome at supporting you.

Good luck!

Seasidegal58

Good morning everyone!

Just a very quick post to thank pippi, toots and inod for their helpful comments. I will be posting more fully this evening but in the meantime it's amazing to think that I have been contacted from folks as far away as Scotland and Northern Ireland! What a great place this forum is!

Seasidegal58

Good evening all!

I’m back with the “Fixed/Essential” part of my outgoings!


Before listing these, I fully take on board toots' and inod’s comments with regard to the number of credit cards I have and getting rid of these one by one. Actually I only have one Santander, MBNA and Barclaycard, but because they each have more than one sort of amount on them due to differing promotional rates and percentages, etc, I have listed these separately for my snowball and for clarity. That still leaves me with six credit cards which are far, far too many and I look forward to getting the debt down and closing them. The Santander card is a Zero card which I got because it’s a good card for overseas travel, but I filled it up when they offered me 0% rates. I will keep it just because it doesn’t charge on foreign transactions and hopefully I might be able to get a good rate later to move some of the other debt across – mind you I don’t envisage doing much flying around the world in the near future!

With regard to a SOA, I wasn’t going to post one initially but may do so after my Easter postings.

Anyway, on to my list of what most people would consider essential outgoings –

• Mortgage – as I mentioned in my previous post my mortgage is very small and with interest rates having been so low for so long I am only paying out £106 per month.
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• Energy – I have an electricity only home with Economy 7 storage heaters. I went on a comparison site last year and I am on a fixed rate until end August which is £39 monthly though it might go down a bit now we are out of winter. I’m pretty good with turning things off. The heating is currently off at the moment, apart from the bathroom.
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• Water – In my area I’m serviced by two water companies – one for sewerage (£11 per month) and the other for the rest of my water needs (£6.80). The sewerage is calculated on a rateable basis so I can’t do anything re the cost here, but on the other I have had a water meter for some years – have showers, not baths and don’t have a dishwasher.
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• Council Tax – This is £81 per month over 10 months and this includes my 25% single occupancy discount. I like paying it over 10 months as I can throw the two free months cost at my debt (as I did this year!)
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• Service Charges on Flat – This is £356 per half year. Can’t do a lot about this although the flats are well maintained.
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• Building Insurance – This was £266 last year, but again this is charged by the freeholder under the terms of the lease so although I am sure this could be cheaper there’s not a lot I can do.
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• Contents Insurance –Got this via comparison site and paid for it in one lump – was £76 annual.
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• Travel Insurance – got this last year again in full via comparison site. Was yearly £65 (high due to existing medical condition).
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• Regular Medicines – paying for these via yearly NHS prescription card - £104 annual.
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• Home Phone - £15.40 per month – land line with free weekend calls. I’m going to ring the provider to see if I can get it down.
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• Mobile - £10 per month pay as you go.
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• Tax – I’m PAYE but fill in self-assessment form and so I get an extra bill each year because of my benefits in kind at work. This January it was £152 so I am putting a bit away each month for next year.
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• Travel – I commute to work by train and so have an annual season ticket which is the cheapest way to pay and this year cost £3,128. I get an interest free season ticket loan from work which is debited from my salary each month over ten months costing £312.80. The two non-paying months I will be throwing at the debt! I know the cost of this probably seems astronomical to some, but it’s the only practicable way I can get to work and I would not be earning anything like I do working locally.
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• Food/Household – Ah this the one where I do feel I can cut back – in fact I’m going to have a special post later on just for this category!

Well that’s my essentials list. I might add that I do not have a car so don’t have all the associated costs that incurs.

I’ll be taking a look through my non-essentials tomorrow. Off now to catch up on a bit of TV!




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