From care-free spender to debt-free saver

craididlyaig

I've never really thought too much about debt.

I earn more money than I need to get by on. Not a spectacular amount by any means, but my outgoings have always been pretty low. For the longest time I've just spent money on what I wanted and added direct debits for services that I wanted to use without really thinking about it. Sometimes there isn't enough money left for things I've wanted to buy so I've taken out loans, upped my limit on my credit card etc. After all: I earn more money than I need to get by on and my outgoings have always been pretty low. Right?

Wrong. It turns out that if you pay no attention to what you are spending you end up in more debt than you can manage! Which has brought me to this forum.

I've read some of the diaries on here and this seems to be massively helpful to so many people. I need to get tight control of my spending quickly and this is going to be a huge change for me. I think what would work is what some people have done with a daily diary, detailing exact spending and debt reduction on here.

So, here is my situation:

I work full time, and my wages, after tax, work out at £1339.15 a month.

I have two credit cards, the balance on one is £666.27 and the other is £1758.54.

I have two long term loans. One of which the remaining balance is £4156.80 and the other is £1659.86.

I have two short term 'pay day' loans which total £468.08

I have an overdraft of £969.99.

All this means that my total debt is £9679.54. Today is the first time I have added all this together. It's a pretty uncomfortable feeling. So, what is the plan?

I have cancelled direct debits for everything I don't really need. Unused gym memberships, Netfl!x accounts, cinema cards and the like. This has left me with (after all essentials have been paid for) £223.12 a month.

£223.12 - this is for food, clothes, travel, household items, nights out, birthday presents. Everything.

This situation will slowly improve as I pay off the shorter term pay day loans, however. But I still need to make sure I have a tight grip.

I can live pretty cheaply. I am a single guy, no dependants. I do not have to travel far for work, and no longer smoke.

The largest loan has 20 more months left to pay. I would love to have my credit cards and overdraft paid off by then. That is the goal. If possible, I would like to be able to repay this loan early also. Then, like so many others on here, I would like to use the budgeting skills I learn along the way to save up for a deposit, buy a house.

But baby steps...

Right now, I have no idea how much I actually can get by on in a month. As I said, I've never been one for paying attention. This is going to be the challenge. I am going to keep a daily log of my spending on here, for my own use as much as anything else. I will also keep a running total of my debts.

In the short term, my overdraft is not going to be going down. It's my current account, and is the only money I have access too. I have opened a new current account, and I will start getting paid into this account so I can treat the overdraft as a separate debt but for the moment I will not be paid until the 15th.

I realise I've written a lot here, and I plan to write much more in the future. Any advise or encouragement would be so appreciated.

craididlyaig

So, I realised that as a diary, this is in the wrong place. I have opened a fresh one in the right place!

Bobarella

Good luck Craid. You sound like you've made some good progress already.