Digging us out of this debt mountain

midlander81

Hi,


I decided to start a diary to document my journey to becoming debt free. At the moment we owe around 40K in unsecured debt










I am 33, married with 1 child. We are fortunate that we earn a decent combined salary of around 70K which means that we can pay this debt off relatively quickly IF we are focussed!!


The debt built up following maternity leave, home improvements and our wedding. I think that we have just realised that unless we sort it out now we are going to end up in an unmanageable situation.


The plan is to make payments of £1500 per month. This includes a significant overpayment and most of our CC debt is 0%. We have 2 loans and the big one (£364 per month) ends in 11 months. This will allow me to use the £364 to make additional credit card payments. My wife's loan of £179 per months has 2.5 years to run. This is a decent rate of 4.8% and we used this to finance our cars so we can justify this.


My goal is to clear all of the debts by Christmas 2016 but my short term goal is to pay off £6500 by this Christmas.
After paying all of our bills and debts ( inc overpayment) and essential living costs including fuel and food we should have around £600 leftover so there really is no excuse for failure!!

wannabehermit

Just wanted to say good luck, stay focused, and when it gets on top of you or something goes wrong keep on posting.

midlander81

Woke up today feeling relaxed and positive about the debt free road ahead.


Decided that we need to do more to bring our debt free day forwards. We are currently on track to be debt free by the end of 2016 but realistically this could be achieved sooner by using some surplus to make extra additional payments ( we currently overpay to the tune of £1500 per month)


My wife is happy for me to manage our debt and to be honest this suits me fine. She is supportive and we both know that our spending needs to be reigned in. My wife knows that we have a lot of debt although we don't really discuss it and we have never discussed exact figures although she does know that it is above 30K.


Gonna have a look through the cupboards later and see if there is anything that can be sold on ebay.


Have a good day everyone

midlander81

Not posted for over a week. Had a few days away with wife and son by the sea, nothing fancy or expensive but some much needed down time away from everything. Being away from it all allowed me to really reflect on our situation and the reasons WHY we are 40K in debt and the mistakes that we have made over the last 8 years regarding our finances.


I think that I have been a little in denial about the reasons WHY we are in debt whereas it now all seems clear. I used to roll me eyes at our friends who claimed that they could only afford a few days camping as they were 'saving' whilst we would be off on a 3 week holiday to Greece. I used to secretly snigger at our friends who would refuse to enter into rounds on nights out. I used to think that friends were being tight when they would say " We can't afford to come away for the weekend" whilst I would pay for ours on a credit card claiming that I would "Pay if off on payday". I would turn my nose up when friends spoke about eating leftover food from the freezer until payday. AND THE HARSH REALITY IS..... THEY WERE RIGHT!!!


Most of these friends have now moved on to bigger houses, have been able to have and afford more children and are generally in a much better financial situation than we are!!! I know that you can never really know someone else's financial situation but I am fairly sure that I have messed up the most!!!!


Now for the positives ......
We know what we need to do and we are doing it. My attitude towards money has changed massively and I am determined to shift this debt. We are luck to have decent incomes that allow us to shift the debt relatively quickly.


Back to work on Monday after 6 weeks holiday and for once I feel happy and ready to go back. I need to get back into a normal routine and focus on getting this debt right down.

PinkPoppies

Sounds like you are on the right track! :T

It's interesting how perceptions change isn't it! The more I get into our DF mission the more I look at friends splashing out on expensive foreign holidays and the latest technology and immediately wonder about just how much debt they are in, rather than feeling envious.

Like you, we hope to become debt free in 2016, and it's not such a long time away really. There will be plenty of time for nice holidays and treats once we have the money we currently spend on servicing debt each month- I'm clinging on to that!

Have a great weekend :beer:

midlander81

Hi PinkPoppies,


I expect that a lot of our friends have debts too although it's one of those things that you don't discuss isn't it!! I certainly haven't told them about our debts I suppose for fear of criticism or judgement.


It will be great to have the extra income when these debts are gone but for me the fact that we are debt free will be enough - I can't wait!!

killerpeaty

Hi Midlander,

Congrats on the LBM and beginning to change your mindset. Have you made an action plan? I find having a goal, or set of goals, for each month is very motivating and I can measure myself against it.

What would you like to do after you're debt free? Save for a new house? Start investing? Afford those kids you mentioned? You don't need to answer, I find it useful to motivate myself again. I have decided that when I hit an amount of cash savings, I will save up for a tablet (thinking surface pro) and then move out of the family home.

midlander81

Hi Killerpeaty,


goal number 1 is to pay off 7K by Christmas. Long term we would like to move house so that will be our focus when the debt is cleared. We would also like another baby although not sure if we will wait till our Debt free day for that. We struggled to have the first one and we aren't getting any younger so we might have to bight the bullet with that one sooner rather than later!!!! Fortunately my wife has a very good maternity package so it shouldn't impact us too much plus we have kept all of the 'baby stuff' from our first one. Our child starts school next year too so the money we currently spend on childcare would cover some of the baby costs.

midlander81

So this week will be a week of low spending with at least 3 no spending days. I got paid a few days ago and this is a real danger zone for me as despite my debts I always think "I've been paid - I'm rich"!!! So I am counteracting this by NOT spending anything!!!!

kindofagilr

Well done on doing a diary, you sound like you are right on track xx

PinkPoppies

How's it going midlander?