Let's Do This....Debt Free Before 2019

ShiftThisDebt

I don't even know why I've decided to begin writing this diary right now. It's really late and I have to be up early in the morning. However I feel like I just have to write this down.

I should probably begin by introducing myself. I'm a 32yo father of 3 girls and live with them and my wife, 31! Oldest daughter is secondary school age and the other two are 4 and 2.

I thought I had my LBM a couple of years ago when I was retraining when I had to, for the first time in my life, sort my finances out to ensure we got the cheapest deals on everything we could. I was very pleased when I saved us over £1000 and got bitten by the finance bug. I've been obssesed with taking care of money ever since.

Anyway what I have come to realise is that we are paying a flippin fortune servicing CC debt and when I think of what we could be spending that money on I get really annoyed!

I have also realised that my true LBM came just before Christmas. I've totted up our debt (and a full SOA will follow soon) and it stands at the following approximate amounts:

Credit Cards: £13000
Loan: £5000
Family Loan: £16,000 (house deposit)
Car Finance: £1000 (final payment after 5 years in June :beer:)
Overdrafts: £1700
TOTAL: £36,700

However there is some good news in all this and I am actually pretty confident we're going to be okay because:

• All the Credit Card Debt is 0% - £1900 until February 2017 £11100 until August 2018)
• The Family Loan is interest free
• The car finance is almost done
• Between me and DW we have an income of £3700 per month

Now, I am totally aware that this is a lot of debt. I also am aware that, thankfully, we have a bit of cash to get this sorted pretty quickly IF we remain focussed on getting it paid off.

The goal is simple, pay this debt off by the end of 2018 - that's 3 years.

Thankfully with so much of the debt being interest free it's going to make things a lot simpler.

You know that week inbetween Christmas and New Year where no one does anything productive or worthwhile? Well I did!!:j I ordered 3 credit cards!! :eek: Don't freak out though it was purely for balance transfer purposes. It has meant I have transferred the £13,000 of CC debt from our 4 cards (with interest rates all above 25%) to 0% cards - which incidentally are in the cupboard and will remain there! I know we haven't paid anything extra off this debt yet but the simple fact it's all interest free felt like a reallypositivee start to the year.

I did a SOA on another thread on this forum but it really needs updating especially as since I did it the CC's have been changed and unfortunately we took out a £5000 loan for essential home repairs (new boiler and roof work) before Christmas...we simply didn't have the spare cash. I think the loan is at about 7% and I am going to find out if we can make overpayments because obviously this is the only debt we have with interest on (apart from the expiring car finance.)

Anyway, as some forum users pointed out to me when i posted the old SOA it looked like we had over £700 spare cash a month and they wanted to know why I couldn't use that to pay down the debts. I'll be honest I probably swore at those comments because I simply didn't want to hear them.

Of course, the truth is they are correct....so where is this £700 a month going, because we never have anything left come payday. We don't struggle, but we clearly are frivolous.
I am going to get the bank statements out and see if I can work out where thsi money goes.

I also discussed with DW about having an allowance each month and when it's gone it's gone and she was well up for trying that which I think is great. Becausemy hope is to increase the £310 a month we pay on CC's to at least £500 or possibly £600 if we can. However I'll go into more detail about how I see us tackling the debt and in which order at a later date!

Anyway, thanks so much for reading and I hope I haven't been too rambly!!:rotfl:

Any questions please leave a message! Look forward to writing this diary over the coming weeks, months and years!

Kitten868

Hi,

I transfer my 'surplus' on payday so I can't spend it. You could try that and see what you have to go without?
Like you say big debts but a big income too so you can do this. So is your plan to pay £12500 each year to debt? Well done on getting it all interest free. And is the plan to make minimum payments on credit cards and overpayments on the loan? If you seriously go for it you could have it gone by Easter? (Or maybe not it's a bit early this year) then go at each credit card individually? I sort of snowball but without the interest to spur me on but staying in the interest free period spurring me on. x

ShiftThisDebt

Hi Kitten,

Transferring the surplus is exactly what I want to try and achieve. Once I've gone through the bank statements properly and worked out where the money is being squandered I'll do a SOA which will reflect it.

Having spoken to DW last night she is up for us both having an allowance for the month that we can spend on what we like. I think this approach will really help us as we'll be able to direct a much larger chunk of money towards paying the debt off.

My plan is to pay the loan off first if possible, as that has interest but of course my family loan is to my brother and SIL so I've started paying £200 a month back to them however once the CCs and loan are paid they'll get their money back much quicker than it'd take to pay it at £200 a month!

So basically it's;
Loan
My CC as it only has 13months interest free,
Then the other 2 CCs in my wife's name as they have a much longer 0%

ShiftThisDebt

So, after the balance transfers of CC's I attempted to shut down my MBNA card. :T

However I can't shut it yet because I'm actually in credit to the tune of £12. (My payment came out after the transfer!)

Anyway, so I have to wait unitl the 19th....still it'll be a great day to finally shut one of the cards down.

Kitten868

That's rubbish! They can close it and transfer the cash to you. They did it for me
I appreciate what you're saying about owing them money. I would ask about token payments til the loans gone? Say £50 then £200 when its down to credit cards? Unless they need the money? X

ShiftThisDebt

They have transferred the money to my bank account but they said that there was some estimated interest pending and that they need to produce a new statement. They also said my account can only close on a zero balance. Crazy, but I can wait another week or so.

I know what you're saying about my brother and SIL and they do just want the money back within 5 years. However I have a sliding scale of payments where it will rise in 2017 and again in 2019....though of course I'm hoping to have paid it all off by then anyway. I think I'll just feel happier knowing I'm paying them back.

Cat_girl_2

Good luck with your mission...

I owe a similar amount but aren't so lucky with the 0% deals, I think with a bit of luck in the next 12 months I can do some shifting around to minimise the interest damage though.

I've set a goal of £11000 to pay off over the next 12 months.!!!

ShiftThisDebt

Cat_girl wrote: »

Good luck with your mission...

I owe a similar amount but aren't so lucky with the 0% deals, I think with a bit of luck in the next 12 months I can do some shifting around to minimise the interest damage though.

I've set a goal of £11000 to pay off over the next 12 months.!!!

Thankyou Cat Girl.

I must admit I was surprised that I was able to get all the CC's onto 0% but me and DW do have a good credit score (and actually I think DW's must have improved since last year because she got the best deals on her new 0% cards, long terms 32 month & lower interest rates on offer 21.9%)

Good luck with your journey too. I've just noticed your own thread so will go and read it now!

12_month_challenge

Hi Shift this debt

I have read your diary and have subscribed also. I am in a similar situation to yourself. Check out my signature :eek:

Anyway I am making regular payments using the snowball method and so far its working for me.

Slowly but surely I will get there and so will you. Small steps and plenty of reading on here. I have gained so much knowledge and inspiration from this site I am now officially addicted :rotfl:

I have had some :j days but also had some days. I suppose that's to be expected though.

Good luck with your journey and well done for getting your CCs to 0% This is one of my aims too

ShiftThisDebt

12_month_challenge wrote: »

Hi Shift this debt

I have read your diary and have subscribed also. I am in a similar situation to yourself. Check out my signature :eek:

Anyway I am making regular payments using the snowball method and so far its working for me.

Slowly but surely I will get there and so will you. Small steps and plenty of reading on here. I have gained so much knowledge and inspiration from this site I am now officially addicted :rotfl:

I have had some :j days but also had some days. I suppose that's to be expected though.

Good luck with your journey and well done for getting your CCs to 0% This is one of my aims too

Hi 12month challenge, thanks so much for subscribing.

I have started a snowball too which I'll share more details of another time. It's a great tool and one that's really helped me realise the power of paying the right debt off first, even though it feels unnatural to simply pay minimum amounts on all but one debt!!

ShiftThisDebt

Had a productive day, managed to finally switch the remaing £260 from my wife's Capital 1 card to her new interest free card. That means I have just £40 remaining on my barclaycard that has interest on it but I have now set that card to pay the balance off next month so that'll be another card down.

Also, I've had a NSD today which is ace!

Plus, me and DW have been making a huge effort to make packed lunches for workso everyday since going back last week we have had things like pasta salads and healthy wraps. Feeling better for it and also saving important pennies.