Drowning in debt - please help!

*zippy*

100 months is just your starting point, you will be able to reduce this, you will both have wage rises etc and may be able to earn a bit more through selling things on ebay or save a bit here and there off your budget.

I always think, how long have I been in debt? for me thats about 10 years, if I do nothing I will spend the next 10 years in debt. By cutting back and paying a set amount each month i know I will become debt free and there is a light at the end of the tunnel.

It does become quite enjoyable really as its like a personal challenge, you will have ups and downs, but thats why the board is here to support each through it.

LandyAndy

orton7 wrote: »

Yup, you're right. It's time to stop spending! I reckon that we can easily cut back about £1000 a month of our current outgoings. Which seems a lot, but when you think we've got £100,000 of debt, it will take about 100 months to pay off ie just over 8 years - a long long time to endure penny pinching. But we don't really have a choice. And hopefully our incomes will increase in the coming years.

If they are all at 0%. Otherwise a lot longer. Nevertheless it is the way to go. Understanding your spending is vital. So is actively managing your debts. Analyse each credit card debt and actively try to reduce its cost each month. When I had my LBM I was paying over £1000 per month in interest on my credit cards. With careful management I reduced this to under £500 in two months without significantly reducuing the capital outstanding.

orton7

Unfortunately not all of the credit card debt is at 0%, so yes, you're right it will take even longer than 100 months to pay off at £1000 extra a month. How sobering.

orton7

Hi, can anyone give me advice on pensions? ie is it sensible - or madness- to continue paying into a (non contributory) company pension scheme when we are in so much debt? Or is it better to clear debt first and then focus on pension?

RAS

Hi

You could head to www.whatsthecost.com and check out the most effective way to pay the debt off using the snowball.

Also that might be an incentive to see what you can raise from other sources, e-bay extra work, saving on expenditure, as you can see how much you will save in the long run.

Bestthingsinlifearefree

orton7 wrote: »

Hi, can anyone give me advice on pensions? ie is it sensible - or madness- to continue paying into a (non contributory) company pension scheme when we are in so much debt? Or is it better to clear debt first and then focus on pension?

If the company was contributing I would say keep it going.

If it'sjust your contributions I would suspend them, focus on clearing the date and build up pensions / savings at a later date.

Worse case scenario in the future at retirement age you could sell up and live some where cheaper etc etc.

.....however I would suspend Sky before I suspend pension contributions;)

Bestthingsinlifearefree

The other thing Orton try not to look on / approach the challenge like it's a 100 month prison sentence otherwise you will just demotivate yourself.

Foucs on daily, weekly, monthly short term goals.

OK how can I save money tomorrow Tuesday 31st July?

Ok I will get the tube instead of that taxi, make sandwiches for work, not make pointless mobile calls etc etc.

How can I save money this weekend ? Ok lets plan a cheap day out e.g picnic in the park....round the British museaum..

ok lets see if we can go one week without eating out / getting chineses / take away food.

ok. lets go one month with out buying any DVD's

etc ect etc

Focus on your daily battles and weekly / monthly targets. start winning those CONSISTENTLY and all will be well in the medium / long term i.e look after the pennies and the pounds will look after themselves.

Keep posting I am have flagged this thread to keep an eye on your progress.

It's a marathon not a sprint.:beer:

sunshine_shell

You can make it!!! just small goals it'll soon make huge inroads into your debt!

nonsensefactory

I know exactly where you're coming from re broadband being down for 3 months. I had the same experience with BT, out 3 months, worked for 2 then out again for another 2 months. Horrific.
With regards to the debt situation, I think all posters (summed up perfectly by Clapton) have made the points I was going to make. Tackle the high APR, small debts first and then you'll feel (and see) that you're actually getting somewhere.

orton7

Well, spurred on by all the great advice I've received from you helpful people, today I've switched to a cheaper energy supplier, saving about £250 a year, and have changed a high interest MBNA credit card - interest 21% apr ouch! to a 0% deal for a year. I've cancelled the £100 a month standing order to a savings account I have got for the kids, and I've been checking out the contents of our freezer and larder before splurging more money unncessarily at the supermarket. To be honest, I think we've got enough food in the house to last us for a month! Small steps, but it all helps. Any more comments on the pension situation gratefully received - ie is it mad to continue to pay into a company (non contributory) scheme when we are so much in debt? or should we focus on clearning the debt first and then worry about saving for our dotage?