DFW journey starts today

twiggy86

Hi

Been lurking for a while but today I am determined to get things under control - so this is my fourth step!
Here's my background info! I half inherited a house last year so have finally moved out of the parents and in to the real world of responsibility! The key reason for my debt is that the house needed extensive work doing (completely re-wired, replumbed, plastering, flooring etc etc!) Whilst I had some savings for the work, this quickly ran out and so resorted to putting it on my credit card to get the house into a habitable state. There's still lots more work that needs doing and so I need to get back on track money wise and get some savings otherwise this will continue to spiral.

First step was to calculate my total debt:-
Credit card - £6,652.48
Next - £436.48
Overdraft - £480.52 (interest free)
Parents - £820
TOTAL - £8,389.68 (eek)

So my second step was to apply for an interest free credit card to transfer some of my current balance. However unfortunately I got refused.
So my first question is - I know Martin says to space out applications but how long should I leave in between? I've made an appointment to speak to someone at the bank next weekend but worried this isn't enough time between applications but also really want to get some debt shifted.

I've also started working on a budget so that I know exactly where I stand (third step!) My second question is - if I budget £20 for X and £50 for Y etc - where do you keep your money? (No I'm not a burglar!) Do you keep it in your bank and just note how much is in each pot or do you draw it out the bank and keep it in separate envelopes? I have got a couple of accounts with my bank so all my household DD come out of one so that is separate from my everyday money. I know I would feel more in control if I had it in separate envelopes but then what if I do online shopping?!

I hope this is the right post for this - any help would be greatly appreciated!

foxgloves

Hi Twiggy,
I budget £250 a month for groceries & withdraw some of that as cash for using at local butcher, market, etc, & leave the rest in our current account to cover supermarket shopping each week, which I pay for with debit card.
I have 6 Savings Pigs, which are just big envelopes, for the following categories: Car maintenance, Household maintenance, Clothes, Leisure & entertainment, Holidays & Presents. When we get paid each month & I set the budget, I withdraw cash to pay into the envelopes.
The system is easiest to operate if you stick to using the cash. However, I do sometimes buy online, so I would either make a note that I had spent say £15 on a present & knock that off what my next payment into the envelope would be, or if it's nearer the start of the month, I'd spend the £15 online, then take £15 cash out of the Presents envelope & add it to grocery purse, remembering of course to deduct it from 'Amount of grocery budget left in bank' total. That sounds so complicated, but it really isn't, because you just find something that works for you. The important thing is to make a note of everything so that you can keep each budget straight.
Sounds like you are getting off to a good start!

twiggy86

Thanks foxgloves - it does sound complicated but also easy! I get paid next week so I will get my envelopes at the ready!


Having started to work out a budget which includes putting aside money for things like house maintenance, car maintenance, insurances etc its hard to see where all my money is going at the moment as I don't save for anything of those things!

twiggy86

Rubbish - just remembered I bought our beds on finance! Completely forgotten to add that one in, as have to pay it by May next year in whole or then we go on to a payment plan (and interest!) so not something I've been thinking about. So need to save so can get them paid up by May. Just trying to wrack my brains if there is anything else as it's pretty scary that I had forgotten about a debt of more than £1,000!


So that takes my total to £9,863.64


However I double checked with my mum today how much I owe them and it's £200 less than I thought!

GettingOrganised

Hi and welcome Twiggy, not sure if getting more credit (even with the best intentions) is the best option. Many of us on here, me included, will tell you that consolidation often leads to further debt.

As well as the number of debts and totals, you need to consider the interest rates of each. Then once you've sorted your budget, any leftover money should go towards the debt with the highest interest and minimums to the others. You'll need to consider how much interest you'll pay on the beds after the interest free period - if it's extortionate, it could be best to start with this.

There's a snowball tool somewhere (I haven't got a link, but someone will be along soon with one), which will help you figure which debt to pay off first. Also, most recommend completing and posting a Statement of Affairs - again, I'm sure someone with a link to this will be here soon.

Good luck on the start of your debt busting journey.

twiggy86

Thanks GettingOrganised.
Just so I'm clear - are you saying that I shouldn't try and get an interest free CC? I'm currently paying 19.9% which equates to over £100 per month - so my plan was to get a interest free CC and use the whole balance of that card to transfer from my current CC and then reduce the limit of my current CC to whatever the balance then is (i.e. I can't spend anymore on either of them) and reduce the limit as I pay them off.
I can't find all the paper work for the beds but I do know that if I don't pay it by May I'll go onto a 3 yr plan and pay back approx. £1,200 more.