A new start - getting rid of lingering debt

numbercruncher8

Hello. I wanted to start a new diary, a new sanctuary where I can post some thoughts, specifically financial.

I feel a bit sheepish posting here because the size of my debts are not large in comparison to those that I have read. However, I must admit my own financial circumstances are beginning to drive me crazy and give me sleepless nights.

For the past 5 years, I've had two credit cards. At various times, I have owed about £3,000 on them. The trouble is, I've gone through a cycle of getting them paid off almost so I can see them off, then something happens, and I get negligent and end up back where I started again. My current debt on these two cards is over £3k now, all of it made up of nothing spending.

I suppose the moment I realised how idiotic this was when I was talking about pensions. I have none, and the £10 or so I pay on my cards every few days could have gone into a pot for this. Had I not gone and spent this cash I would have had a decent pot by now and that is upsetting to say the least.

Another worry is money coming in. I work as a freelance web coder. Income is not fixed, neither is it certain. I require £1,500 a month to cover all bills, mortgage, food. The industry isn't quite what is was, but I just cannot summon the motivation to go after a career that interests me. At the same time, being unsure of how much you are going to make is a real worry. I see little growth potential in what I am doing, and indeed, many downward pressures.

2014 has been a terrible, terrible year in many aspects. Business has gone OK but I have had losses of £4,000 which were not my fault. Some of this was money owed to me but never paid, some of this was a company holding my funds overseas going bust.

This would have been fine but I rather stupidly decided to take on more work to try and recoup this. This only made things worse. I bit off way too much than I could chew, and to keep my word I had to hire in expensive help at the last minute. I estimate I have lost another £2,500 chasing the initial losses, this time it is my fault.

The part of my brain that needs help is accepting that at the end of the year I might actually have LESS money than what I started it with. I mean, I'll still survive, but I'll always think 'what should have been' rather that what is now. Losing any amount of money now irritates me a lot.

I can't lie, it hurts immensely. I was planning to redo some things in the house, perhaps go on a big holiday next year with that cash. These things are on hold at present.

Having these annoying debts for the past 5 years almost has been a millstone around my neck. I want to clear them once and for all, be sensible with money management and eventually save some more money.

I also want to gain extra motivation to work more efficiently than rather being depressed and worrying. I have been meant to be studying extra qualifications, languages, since the start of the year but instead I have done f-all in comparison. I feel ashamed of that.

I actually started to see a therapist at the start of the year. But I'm not even sure that's what I need now. She doesn't want to hear specifics and more to do with what causes the feelings.

Anyway, thanks for reading!

numbercruncher8

OK - today I'm feeling good. Although procrastination is one of my worst habits.

The good news, is that today I have made enough money (this month to date) to cover the basic monthly costs and bills - and there are still 14 days to go in the month! Although it's difficult to actually see this. I don't get paid like a normal person, it comes in dribs and drabs, and this is only a paper figure, could be subject to deductions at the end of the month.

The figure doesn't include any spending over and above the basics either, so I suppose that explains the tight spot. I've been pretty decent on food - £20 a week is usually what I spend, but other one-off costs are really annoying. Just this week, I had to buy a new vacuum (£50) and also a cash payment contained £100 less than what it should have done (no idea where it has gone).

I checked my credit cards today. The business credit card (which theoretically should be cleared every month) is a disaster, the debt stands at around £2,300 on this. This is not too bad as the majority of this was (£1,700) was on a balance transfer. I must have paid hundreds over the years on their fees though.

The Barclaycard is the main debt that I need to sort out. This was on a balance transfer that has now expired. £1038.13 was outstanding on this. I have a direct debit in place (£100 a month). I paid £38.13 (to take it down to £1000) and emailed them to ask if it was possible to block any further transactions on the card.

I feel gutted because £38.13 is quite a lot of money really, and that could have paid for something nice (had I not been in debt).
Now that the minimum payment is sorted, I believe I can top-up any amount, so I'm going to just put on-to the card any unexpected monies that I get.

numbercruncher8

Well, this was annoying. As soon as I thought I was having a good roll - BAM - something went wrong with the car and this cost me £170 to fix.

Expenses like this really depress me and take a long time for me to stop worrying about. In this vein, over the last 10 years I must have spent tens of thousands on things I didn't want or need, or just squandered. In fact being more careful with money I would have been in a great position now, instead I'm not. One of my weaknesses is regret.

On another note, I had taken on some more focus group work. This is a good way to supplement the income. I had one last week and one this week, both at £50 a go.

Paid off £10 onto the Barclaycard so the balance there now stands at £990. I intend to scout around, see if I can pick up 'free money' on Topcashback or the like to reduce it further.

belleandthebudget

Hi NumberCruncher, I felt the same starting a diary as my debt is around £4600 so not nearly as frightening as some people are bravely tackling. However, I started with a small amount of debt and it spiralled quickly so I'm glad to have this place to hopefully keep me on track.

Sorry to hear about the car and other niggly pop up expenses. Those are the bane of my existence too.

But best of luck! It can only be a good thing to tackle the debt now and maybe work on building a little cushion of emergency fund so you're not as worried about the freelance lifestyle!

numbercruncher8

Hey belle - thanks for commenting. I am so sorry about not updating the diary. It feels that some days, I don't feel there is anything material to add to it. About 2 weeks have gone by. It's amazing how much time flies, but the balances on the debts don't go down! Here are edited 'highlights' of the period:

1) Work - I think, according to my records, I have had a very decent couple of weeks, and a good start to the month (not always like this). The bank balance doesn't always reflect this straight away because cash is received after the event. We'll see.

2) Expenses - Aside from a trip to see the girlfriends in-laws, which costs around £30 in petrol, and more money in terms of meals out there haven't been too many big expenses. Niggly ones keep on popping up like the dentist (£45). I wish I could have every day no spend, it would be bliss.

3) Set up a 'Topcashback plan' - gonna do as many things off there and use the cashback generated to pay debts. Hasn't started too well. Did Graze and Experian and both non-tracked.

4) Changed broadband deal to the EE one posted in MSE. I am on Talktalk (£15.95 a month, plus £15.50 fibre broadband) so that's a considerable saving. I also ordered a Talktalk £5 a month SIM only deal (with cashback of £63!) to replace my O2 deal which is expiring this month. The only switchable thing left is the utilities which I haven't made a decision on yet.

5) I had already totalled up debt, but now it was time to total outgoings. My core outgoings (taking into account the smaller telephone charges), is apprx £1,200 a month (rounded up to allow for contingencies). This doesn't apply for food or leisure.

6) Debt The most important thing. Barclaycard said they can't block me from the card, which sucks. The direct debit payment came out so the balance is down to £890. Cashflow is uncertain so I won't be topping this up (but I hope to next week). The AA credit card has stayed static at around £2k but (smaller) interest is being charged on this, I hope to clear one first.