10 years of debt is enough... I quit!

Debt_free_by_2020

I'll start off by saying Merry Christmas/Happy Holidays, whichever people prefer

I'm 27 years old and have been in debt for almost 10 years now. It all started with a student credit card and an overdraft. I was mis-sold my student credit card and have since had the interest etc refunded to me and have paid that card off completely (the whole £500 that I had accrued on it). However, I guess this goes for a lot of people, at 18 years old I wasn't exactly the most responsible 'adult' and ended up racking up a couple of grand of debt that I could (and should) have avoided.

The credit card was just the beginning, during my first year of university I had a £500 overdraft with one bank and as money got tight I opened another account and got a second £500 overdraft to help tide me over. During the second year of university this was manageable and I even landed myself a full-time office job for the summer between my second and third year of university meaning that I was financially pretty stable.

Sounds brilliant right? Why are you in debt now then I hear you ask. Well, the first bank account I had opened for university had been refusing to up my overdraft during tough financial times but, seeing I had a full-time job paying over £1000 per month, decided to up my overdraft facility from the original £500 to a whopping £1750 without even telling me! I got a complete shock when I looked at my overdraft on payday I can tell you haha!

Anyway, this was useful in the sense that I was stressing about having to still pay my university accommodation during the summer months so this took the initial weight off my shoulders but I so so so wish I'd had to suffer and be church mouse poor that one summer until my university loans got paid to my account as I could have been saved all this headache for the rest of the time.

It's not just my bank's fault, I'm fully aware of that, but I wish I'd never been given the temptation/option of splashing my cash without worry in the first place. I don't know many other 19 year olds who could have resisted the so-called 'free cash' when first living on their own, in a new city and figuring life out. I don't deny that it was a great summer/autumn but I've definitely paid for it in terms of stress and anxiety since the money finished. I've since then added more and more debt to my name and it has become a real lifestyle habit that I do not enjoy.

Anyway, the point of this long-winded, boring story is that I am finally sick of feeling like this, I don't want the weight of this original debt, or any that I have since accrued, hanging over me anymore!
Here's to being totally debt free (minus the whole £20,000 student loan) by 2020 and at least £3,980.69 lighter in 2016!

I'm going to be tracking my progress on this post and might be asking for some help/advice from time to time too depending on how things go. I've joined the Debt free by Xmas 2016 challenge so hopefully that will spur me on and I can at least get the initial big dent started this year.

Thanks for reading, sorry to have rambled on so much

enthusiasticsaver

Good luck with your debt busting and it sounds like you are determined. Why not start by doing a monthly budget and working out how much you can pay off every month but remembering to keep enough aside to pay your bills and emergency savings?

Debt_free_by_2020

Thank you for the encouragement enthusiasticsaver

A budget and plan of action are definitely needed but I'm not really sure what the correct/best way to approach that would be. Perhaps someone on here could share their tips on how to start getting this kind of a mess in some sort of order. I feel like organisation is going to be my best friend here seeing as chaos was the devil that allowed me to get in this state in the first place haha :rotfl:

bearcat16

I didn't fully understand how much debt (aside the £20k student loan) you have, was it £3,980?

If so, it is annoying, but not a terrible amount if debt.

The first thing I'd be looking to do is stop paying interest and fees on it. So unless you have an interest-free overdraft, I'd look to be shifting it onto a 0% money transfer credit card. (Eg MBNA or Virgin Money)

If you put it on a 34 month interest free card, you'd only need to pay £117 a month towards it to clear it within the 0% period.

Personally, I really hate overdrafts as a form of borrowing. Expensive, difficult to keep track of, and most importantly, they can be cancelled at very short notice by the bank.

There are numerous threads on here by people who have been plunged into dire straits when the bank unexpectedly cancelled their overdraft, and they then had 2 weeks to repay it.

Debt_free_by_2020

bearcat16 wrote: »

I didn't fully understand how much debt (aside the £20k student loan) you have, was it £3,980?

If so, it is annoying, but not a terrible amount if debt.

The first thing I'd be looking to do is stop paying interest and fees on it. So unless you have an interest-free overdraft, I'd look to be shifting it onto a 0% money transfer credit card. (Eg MBNA or Virgin Money)

If you put it on a 34 month interest free card, you'd only need to pay £117 a month towards it to clear it within the 0% period.

Personally, I really hate overdrafts as a form of borrowing. Expensive, difficult to keep track of, and most importantly, they can be cancelled at very short notice by the bank.

There are numerous threads on here by people who have been plunged into dire straits when the bank unexpectedly cancelled their overdraft, and they then had 2 weeks to repay it.

Thank for your reply. Yeah my actual debt apart from the student loans is a bit of a mishmash at the moment as I am waiting on some payments to be credited and also as I can't seem to find all of the info for things like APRs etc (plus maths is really not my strong point so I feel like I'm my panicked attempt to get it all on paper I've miscalculated things at least twice.

I might have to have a look at the exact figure in January but let's just call it 4K just to be on the safe side. £1500 is an active overdraft and £1053.69 is a defaulted one, plus the Very account and credit card, both at £500 ish each. Not to mention the family debts and other tiny bills etc.

Basically it's a mess and I feel like I can only concentrate on a manageable chunk of it at one time before looking at it again in more detail.

I have a horrible feeling that my credit rating is totally shot so am wary of applying for any 0% cards etc as I think I might get declined and also if I'm being honest I actually don't really understand how they work i.e. what kinds of debts can be shifted onto them.

Help haha I just realised how out of my depth I probably am as I typed this, I have no idea what I'm doing :rotfl:

Debt_free_by_2020

I should probably add that the £1,500 family debt is just to my mum and my great aunt and I also borrowed an additional £1,800 from my nan which was so that I could pay the deposit and first 2 months of rent on a flat and has been agreed to be paid back once my other debts are sorted.

Ideally I'd like to get rid of the debts which have interest asap (about £4K) and then I could concentrate better on sorting out the family debts, student loan repayments and also building up a savings pot.

Currently I have no buffer or emergency fund which kind of scares the cr*p out of me and also makes me feel like I'm really not very good at this 'being a grown-up' malarkey.

fatbelly

Hi

You're going to try to pay your debts down at about £300 per month over the next 12 months. Is that realistic?

It would be useful to see a statement of affairs (that's a link to a calculator and you can cut& paste the results)

I wouldn't expect you to do working on this on Christmas Day though!

bexster1975

Hello

I agree with all the above. You need to complete a SOA. If you put it up here people will help you reduce outgoings. Good to have had your lightbulb moment, but it can wait a day or two now....

Merry Christmas

Bexster

Debt_free_by_2020

Hello, me again!

I know it may not seem like a massive debt compared to some others (I've noticed some eye-watering sums of debt on this forum since I joined) but in my personal circumstances this sum of debt is crippling at the moment. In part because I am paying off interest on things that are pointless (see below) and in part because I am at an age when most of my friends are saving for house deposits, weddings, babies or all of the above. I am not in a position to do any of that (not that I have a reason to yet but I'd like to have the choice).

I have also been asked to be a bridesmaid for the second time in the space of 18 months and anyone who has been one recently will understand how expensive that honour can be. I spent hundreds on the last one because my dear friend was a little bit of a bridezilla (I still love her). We spent the amount of a small week's holiday abroad on a hen weekend that she hated and then a fortune on dress alterations, shoes, gifts, etc etc.

My next wedding isn't going to be quite as expensive in terms of little things but there will still be a pricey hen weekend (which I hope the bride won't hate) and I am going to be abroad at the time of both the hen weekend and the wedding so will need to fly back to attend them (luckily flights are very reasonable) the wedding is also in a remote hotel so I will have to stay there the night adding to my costs.

I'm not complaining, I'm happy that my friends are happy and moving forwards in life, I just hate how expensive and competitive this kind of thing is nowadays. Hope that doesn't make me sound ridiculously old or cynical haha.

I've started doing a thorough SOA and a budget and it would appear that most of my extra spending is basically used on 'shopping'. This shopping obviously includes a mixture of toiletries, food, make-up and all manner of random pointless cr*p which I can't even remember buying now. I seem to re-cycle the same money on my credit card which is unhelpful. I pay my credit card down and then use that money to buy more of the above mentioned pointless stuff.

I always knew I spent a lot of money here and there 'treating myself' to something little, be it food or make up, but I've never before added up the amount of money I spend in one real month (as opposed to one that I budget for but don't stick to). In 3 seperate months at the beginning of 2015 I spent an average of £280ish on 'shopping'. I cannot imagine that is a realistic or justifiable amount for a 27 year old single person with no pets of dependants! What the hell have I been doing with my life? Honestly!

I'm so annoyed at myself and my seeming inability to stop buying things to make myself feel better when I feel a bit down or sad or stressed. I used to spend an unforgivable amount of money on going on nights out so I guess after I reigned that in I felt I could spend more elsewhere. I used to go over my overdraft by taking money out of the cash point knowing that the bank wouldn't stop the transaction and would just bill me extra in overdraft payments the following month... How irresponsible of me?!

Anyway, back to present day, I'm not ready to post an SOA just yet as I am going through all my spending for 2015 with a fine tooth comb first. Perhaps that sounds a bit extreme but I really want to understand my spending better as I feel it will be more benefitial than just shifting money from one place to another with no clear idea of why.

I also am aware that I would have to pay my debt down by about £300 per month, perhaps that won't be possible every month but I do think I could really make some serious savings that will allow me to get close to that at least some months and that's better than nothing. I'm also looking for a better paid job at the moment so a higher salary would really help bridge the gap. A lot can happen in a year!

What a mess it all is at the moment. Hopefully not for too much longer though, I've never felt more determined to get things sorted than I am right now. The last time I felt this focused was when I decided to get fit and lost 5 stone so I'm hoping for a very good financial 2016 based on that level of determination.

Sorry for the post being a short essay. Hope everyone has had a lovely Christmas!

redlaces

Hey, DFB2020.

First of all, Merry Christmas and well done on your LBM.

I can really sympathise with your situation: I'm also 27, single and have spent my time since uni in debt and attending expensive weddings. 18 months ago I owed about £3500 while not earning much money, and although I'm not being paid much more now the debt is now almost gone and I feel much more freedom. Your debt is definitely doable by 2020 and probably much sooner, although without seeing a SOA I couldn't say for sure.

The best advice I can give you is not to feel obliged to pay out for all the wedding commitments, but try to fit what you can afford around the wedding. For example, my friend got married in a hotel in the middle of nowhere, I was at the height of my debt so I drove myself and 3 friends home at the end of the night, saving £200 overall in hotel bills and drinks! And my friends paid me petrol money to boot Or for UK hen dos you can join them for just a day instead of a whole weekend, this usually saves quite a lot of money.

I understand hen dos can get out of hand really easily and if you have multiple weddings in one year it can add up to eye-watering amounts. Feel free to pass up on anything you don't feel you can afford. For the upcoming one do you have to fly back for both the hen weekend AND wedding? A good friend would realise the lengths you are going to merely to attend their wedding, and would understand that flying back for both events is quite a lot of hassle and expense.

Well done on paring back your night out spending: this is where my money used to go too. And also on losing your 5 stone. It shows you have the determination and drive to finish this debt once and for all.

Good luck, you can do it!

Debt_free_by_2020

redlaces wrote: »

Hey, DFB2020.

First of all, Merry Christmas and well done on your LBM.

I can really sympathise with your situation: I'm also 27, single and have spent my time since uni in debt and attending expensive weddings. 18 months ago I owed about £3500 while not earning much money, and although I'm not being paid much more now the debt is now almost gone and I feel much more freedom. Your debt is definitely doable by 2020 and probably much sooner, although without seeing a SOA I couldn't say for sure.

The best advice I can give you is not to feel obliged to pay out for all the wedding commitments, but try to fit what you can afford around the wedding. For example, my friend got married in a hotel in the middle of nowhere, I was at the height of my debt so I drove myself and 3 friends home at the end of the night, saving £200 overall in hotel bills and drinks! And my friends paid me petrol money to boot Or for UK hen dos you can join them for just a day instead of a whole weekend, this usually saves quite a lot of money.

I understand hen dos can get out of hand really easily and if you have multiple weddings in one year it can add up to eye-watering amounts. Feel free to pass up on anything you don't feel you can afford. For the upcoming one do you have to fly back for both the hen weekend AND wedding? A good friend would realise the lengths you are going to merely to attend their wedding, and would understand that flying back for both events is quite a lot of hassle and expense.

Well done on paring back your night out spending: this is where my money used to go too. And also on losing your 5 stone. It shows you have the determination and drive to finish this debt once and for all.

Good luck, you can do it!

Hello Redlaces,

Thanks for your post, that actually makes me feel much better. Glad I'm not the only one who wasn't the wisest spender these last 10 ish years haha. Also very glad to know that even on a small salary you've managed to get your debt almost to zero. I know it doesn't seem like a scary debt what with it only being about £4K but it is pretty scary when you earn not a lot at all Good to know it's doable, scary but not impossible.

As for the wedding, sadly this is one of my best friends (who I have known since 1st year of university) and I'm a bridesmaid which means I'm pretty much obligated to be present for absolutely everything. It's lovely and all but also quite stressful especially because I'm currently having flashbacks to the stressful 3 years I spent helping my other best friend plan her wedding (I feel like a wedding planner, maybe I could do that on the side for extra cash?! lol).

The hen weekend is a package deal and the bride has already flipped out about one person dropping out and us all having to then share that person's costs across the rest of us meaning the final price per person will be a little dearer. It's going to cost an eye watering £300 at least which I'm just going to view as a forced holiday and will have to cut out luxuries in other areas. Luckily I got given some Christmas money so that will help out a bit. I would consider going for just the day/evening of the hen weekend if that was an option but unfortunately we are headed to Wales from London so it would probably workout pretty much the same by the time you work out trains etc or pay for just 1 night in a hotel instead of 2 in the accommodation with everyone else.

Also for the wedding itself, I have already booked the room at the hotel (luckily we get a discounted rate due to being in the wedding party) and am treating that as another forced holiday (these two forced holidays combined are probably the entirety of my holiday budget for the next 5 years... Oh well).

Your idea of being designated driver is actually really good, sadly I don't drive and would possibly spend more on the petrol there and back home anyway even if I did as I already need to travel for hours to get to the wedding venue the day before the wedding. I honestly don't care who gets engaged next, I'm refusing to be a bridesmaid for anyone else! I just know I'm going to be asked again before I've even attended this wedding

It is an honour to be asked to be a bridesmaid, groomsman, godparent etc, I'm not being ungrateful or anything but I just don't know where everyone my age has got £20K from to spend on a wedding all of a sudden! It's stressing me out majorly to think this is what the next 10 years of my life will be. Weddings and baby showers that I can't afford... Not to mention being a singleton to top it all off lol :eek::rotfl:

I do realise that I sound like a cross between Bridget Jones and that girl from 27 Dresses right now btw HA! :rotfl: