Done it soon to be DF

muz3562 · 15 April 2016 at 7:03PM

Hi there , I have been a long time lurker of this forum

About march last year I moved out on my own(out of my control) and knew that I had to start behaving like an adult and get a grip on my finances otherwise it would spiral out of control.I had tried once after uni but failed because at the time I was not in a well paying job . Last march is was about £4500 in debt
£900 credit card
£1500 Motorbike finance
£1600 old current account from when I was a student
£400 old defaulted credit card from when I was a student

I took a lot of advice and guidance from this forum and started on the journey to rebuilding my finances .

Before march last year when i started this I had really been burying my head in the sand . I had about £2400 saved up which considering my salary and living costs at the time was nothing . I could have easilly paid my debts off and had 4X that saved up but I had been messing about and chronically wasting money .

I could have took them savings and written off over half of my debt straight away but given I had just moved out on my own I did not feel secure wiping my savings out completely .

The first thing I did was sit down and work out my whole cash flow for this past year . this allowed me to see exactly what money I had and where it was going , given I had not lived alone for a few years some of this was based off estimates which actually proved to be beneficial because I had surplus money to pay off my debts . I estimated from my cash flow that it was going to take at least 2 years to clear my debt if I just got my basic salary which is why I am so happy that I have managed to do it in half the time .

The second thing I did was sell the motorbike clear the finance with the proceeds of sale . I had about £200 left over which was kept in my safe at home for an emergency or rainy day , i still have that £200 ,

After this I approached Natwest the bank I had the defaulted credit card and the interest accruing overdraft with . I requested that they freeze interest on both and allow me to reach a repayment plan for them . I agreed that I would pay £20 a month off the credit card and that I would pay £40 a month off the overdraft account . Based of my statement of earnings this was affordable but as you will realise that left me with 2 years to pay the C card and 40 months to pay off the overdraft . The reason I managed to pay these off earlier is because I have a job that allows me to earn a fair bit working overtime/sundays and from commission so I managed to double and triple pay these most months because I worked the overtime and rest days and had the commission coming in .I also got a nice bonus in october last year when my car insurance renewal came in £240 less than what I had expected and budgeted for so that was £240 off my overdraft straight away
I have about £120 left to pay from the overdraft on friday when I get paid

I also devised a plan to pay off my credit card with my current bank . Of the £900 about £650 of it was interest free with 17months left so I knew that I had to pay off the £250 quickly then I could take my time with the remaining £650 - Over the past 13 months I paid it off in varying amounts and I have about £90 to pay off on friday for me to be DF

SO yeah on friday when I get paid I have about £210 to pay off my last two bits of debt then I will be completely free of personal debt .I have actually already done the overtime this month to earn the extra £210 to pay off these debts .

In the past 13 months I have also been adding a bit to my savings each month . I know this is probably considered foolish when you have debts but I had managed to freeze the interest on these debts , and I did not feel secure not having a little bit saved each month for those little emergencies . Most of the money I added to my savings was surplus budget from what I had estimated as car fuel costs and food costs anyway
Over the year I have managed to add about £1600 to the £2400 I already have so now I have £4200 saved up

The next of life's journeys for me is saving up to buy a house . I feel pretty fortunate that I am in a pretty well paying job with the potential to earn some serious money if I put the overtime in .

Just like to say thanks to everyone here for the help that I have received lurking round these forums over the past 13 months . And thanks for taking the time if you have actually read all of this