Uhtred goes Viking against his debt

Uhtred_Ragnarsson

Every story has a beginning and my debt story begins with a decision to sell my flat and move to another one that could be best described as a fixer-upper. It needed a kitchen - it actually had no kitchen at all - and it needed a bathroom, the existing one being beyond the use of anyone who valued their health. Apart from that, it was redecoration all the way plus some new carpets and blinds. At least the central heating was fine.

I used all of my savings between increasing my deposit (I had a little equity in the original flat) and paying for some of the work that needed done. I took a loan with my bank to do the rest. So far, so good.

Of course things didn't go as smoothly as planned and I found electrical and general plumbing work that needed done plus work on demolishing an old outbuilding that on close inspection was clearly about to fall down and was probably quite dangerous. So I began using my credit card.

Whizz forward 12 months and things are fine; I can easily pay the credit card and the loan but the credit card balance has crept up due to an inability on my part to resist a variety of new household goods. So, in an effort to reduce my outgoings and have one easy payment (you probably know what's next) I took another loan to pay off the credit card and pretended to myself that I was sorted!

I was sorted in a way but 9 months later the central heating gave up the ghost, right in the coldest part of the year. It was an ancient thing and not repairable so, I extended my bank loan to cover replacement. Of course, I kept using the credit card, interspersing it with periods of great frugality and paying big chunks off it. Of course, when a big part got paid off it I knew that I could use it again! Yippee!

At this point I'll say that I am still managing all repayments; I have a reasonably good salary and I've never been in any tricky financial spots previously. However, it has left me in the position of being unable to save and it holds me back from doing all the things I want to do. It seems never-ending.

I was quite depressed about it at one point and to make myself feel better I splashed out on a new laptop - on an ARGOS card :eek:. The only mitigation here is that it is interest and payment free for 9 months, but still - :eek:.

So that's why I'm here - I'm going Viking against the debt and I aim to slaughter it brutally at the earliest opportunity.

Uhtred_Ragnarsson

The financial bottom line is as follows: -
Total debt - £14,142.90

This consists of: -
Small Loan - £4,506.07
Big Loan - £7,917.65
Credit Card - £1,419.18
Argos - £300.00

The loans have very reasonable interest rates and payments are fixed. I can make overpayments to both. Two-thirds of the credit card balance is at 0% and the ARGOS balance is currently in the 0%, no payment required phase.
My plan of attack is to concentrate on the credit card and the ARGOS card. I was tempted to focus only on the credit card because some of it isn’t at 0% but as I plan to pay an average of £300 to it each month until it’s gone, interest will be minimal as all payments go to the part of the balance with the highest interest rates. I need to clear the balance before January 2017 as the 0% deal runs out then.
With that in mind I plan to pay £170 to ARGOS in August, £100 in September and the remaining £30 in October – this schedule ensures I will have paid it all off during the interest free period. Then I will close the account.
In the background, my loan balances will reduce steadily meaning that, if all goes according to plan, I will start the New Year with a debt standing at £11,480.22. This is still huge and will cost me £282.00 per month to service; it will however, be £2,662.68 less than it is just now so that can only be good.
After New Year I’m not sure what I’ll do; both loans can take lump sum overpayments so I might put money to savings and then pay off additional chunks of perhaps £500.00 at a time. I really don’t know. A better plan would be to build up a reasonably comfortable emergency fund (the one I have is under £500 just now) and just let the loan payments take their course for a while at least. I don’t know. What I do know though is that paying off the debt is one thing but ramping it up again by ridiculous spending is quite another – I’m painfully aware that I need to change my spending habits and on the brighter side I’ve already started on that.

Uhtred_Ragnarsson

So, what have I done to reduce my spending already?
The new central heating was a pain in the posterior but it did have a sunlit upland – I had been paying around £110 a month for gas and electricity mainly due to the inefficient, old boiler (which could describe me perhaps.) That’s changed now – I used this site and changed my energy supplier from day one of my new boiler and my monthly payment is now £68. Even better, that amount comfortably covers all my use, even winter use so I’m not building up large balances.
I haggled BT down to £21.30 for broadband, line rental and a calls package and I reduced the cost of building and contents insurance and car insurance by almost a third, just by using price comparison sites.
Next up is my mobile and the contract due to expire in November. I only pay £21 a month just now but I like my phone and won’t upgrade. Instead I’ll be finding the most suitable SIM only deal and hopefully drop the cost to a tenner or less.
I was going to say that the changes I’ve made haven’t made a dent in my debt but I suppose it has made a difference in a minor way. By cutting the costs of bills like these I’ve certainly freed up cash for living on that wouldn’t have been there before so I suppose in theory it freed up cash to pay the debts.
In the months ahead the positive things for me are, an ability to manage NSDs on most days, good cooking skills which means cooking from scratch raises not an eyebrow and being on a diet which means I don’t buy junk food or takeaways.
The less than positive things will be getting through a Saturday with friends who think to have a good time you must spend money, Christmas (naturally!) and having to buy a wardrobe of new clothes due to weight loss. The last one is a sort of positive-negative; I’ve lost around 2 stones in the past 9 weeks and by the end of the year I should have managed another 2 so nothing I have will fit me :T
It’s all very manageable though; I’ll just need to pick up my sword and shield and hack my way through it like a warrior should.

rockabillygirl

I didn't want to read and run. Good luck on your journey.

Uhtred_Ragnarsson

Many thanks , I'm sure to get there with all the support on here.

System

Happy shiny new diary welcome.
Sounds like you have a very sound plan and will be making a big different in no time at all.
Am subscribing

Ramble

Uhtred_Ragnarsson

Thanks for the warm welcome . I do have a plan and I'm hoping having a diary will keep me honest about how well it's going. Nothing like the reality of seeing the figures in black and white!

Poor_Single_lady

Good luck with your journey. Hope the diary helps.

tori.k

It's a solid plan wishing you the best.

Uhtred_Ragnarsson

Thanks Poor - I think it will really help to keep me on track!

Uhtred_Ragnarsson

Cheers Tori - I feel positive for the first time in many a long day.