Think I've had a light bulb moment .... SOA just Added

kazza292_2

thanks again everyone ,it has been a rollercoaster week but now feel much more positive.

i have cancelled net flix and sky ( gfplux)
i pay 87 currently on mbna 30 estimated interest (sanctioned parts list)
barclaycard i will get rid of first.
i plan to look again say February next year at a balance transfer for mbna cc just before my deal runs out on that one and interest rates rise.
cards are now in the freezer
i have just done a car boot 120 made
i have just shopped at lidl and spent 70 for week

just about to go and have a water fight in garden with my daughter.
husband going on nights and he is on overtime shift tonight.
again i truly appreciate all your help. it has been scary at times but kept me focused

[Deleted User]

kazza292 wrote: »

I plan to look again say February next year at a balance transfer for mbna cc just before my deal runs out on that one and interest rates rise.

The fact you will have (hopefully) cleared the Barclaycard by then, should improve your chances of getting the BT card.

Indeed, Barclaycard may offer you a 0% BT, in response to you clearing your existing Barclaycard.

However, it's as well to prepare for the possibility, that you might not get a BT card, and will have to tackle the MBNA card, while it's on the full APR.

To that end, I suggest you should be looking to clear as many other debts as possible, with a view to having as much money as possible, each month, to pay down the MBNA card.

Sanctioned_Parts_List

windup wrote: »

Actively using credit cards at Lidl and the like, especially when one is paid off could save £100's in interest for reasons already stated, they are no use in the freezer.

Umm... no. On that path lies madness.

Sanctioned_Parts_List

While you're right, you're also wrong -

What you're talking about is what I do - i.e. treat the credit card as a charge card and milk it for all the rewards and bonuses I can get, while keeping my money in an interest-earning position as long as possible. I get that.

But it is simply not the correct advice to give to somebody indebted, who still needs to learn to control their spending. At OP's point in the journey, it is enough to regard the card as an emergency buffer, but otherwise to STOP regular spending on the cards until she's back on terra firma. Surely that's obvious?

kazza292_2

I have a very clear plan in my head and this does not involve spending on credit cards any more !!

"Ships in harbour are safe but that's not what ships are built for"...however ... I have learnt my lesson with bad spending habits and will now be striving for a happier future riding big realistic waves :T

Money_maker

The problem with access to CC's is that you will use them again unless you have cut them up and disposed of them. Particularly with Christmas coming up very soon (yes, its only around 4 paydays away if you're paid monthly) so simply too much temptation. We sliced and diced ours and got rid. I have some years later now got one (had to apply for it as a mystery shop) but have never used it although they are quite handy for covering you on big purchases.


Using CC's to reap the benefits is not something someone in debt should be advised to do as the few pounds or pennies they save are counterbalanced by the large amounts they can overspend by. Personally I like to use cash as you can actually see how much you are spending.


OP, once you start looking for ways to cut costs it becomes a habit. You will always think twice before buying - even when your debts are clear and you can easily afford it. Good luck.

louby40

Kazza

Now come over to the Debt Free Diaries board and start yourself a diary! I had my LBM back in June, posted a SOA and since then I've switched bank accounts, cleared my overdraft and TOTALLY changed how I spend my money.

I have £1500 on a credit card to get rid of and a £3500 loan off my parents which are my first 2 priorities. Then I need to tackle my £6000 car loan.

Over on the Debt Free Diaries we all follow each other and spur each other on. It helps you be accountable.

Louby

Tuesday_Tenor

Kazza,
A bit more reflection and food for thought on the emergency fund and the family's mind-set.

Some people ARE advised to start building a cash 'emergency fund' as the first priority, even at the expense of ignoring outstanding debts. This is usually at the point where the debts are unmanageable without going on a formal debt management plan, possibly defaults have occurred, and there is absolutely NO access, by scrimping, or by credit cards to ANY other funds (or only to very expensive funds) should an emergency such as boiler breakdown occur.

You are not quite in that position. I'm not actually clear how much 'availability' there is on your existing cards, but I think the point is that IF you do have the supposed 'surplus' £400/month to throw at the cards, in three months you'd have reduced your debt by £1200 which means both less interest being paid AND the availability of £1200 credit should you then have a major emergency. And hopefully you won't have the emergency. So you don't need to put (much) cash aside for emergencies as a priority.

However, I DO think your 'compulsion' to save for an emergency is a very healthy sign, as it shows that, for the first time, you're thinking about using your OWN money to solve a future problem, NOT SOMEBODY ELSE'S. Ths is a fundamental issue for your mindset ( and your husband's).
This from SP is both true, and contains great dangers:

Sanctioned_Parts_List wrote: »

The point of an emergency fund is that you have access to money in times of need. ..... Nobody ever said that money has to be yours, you just have to be able to obtain it in an emergency.

The bit I've put in bold is where you have both gone wrong very fundamentally in the past: using money that wasn't yours. The idea of saving first, then spending (for both emergencies and treats) is exactly the transformation in you thinking that you need for the future. I, Tuesday Tenor, WOULD say that it DOES need to be your own money you spend in future, once you've got over the initial mega-challenges of the most expensive credit cards.

SP is correct to say that the most financially EFFICIENT thing to do right now, in the short term, is work on clearing those high-interest debts. This will have the biggest impact on the amount you have to pay back overall over the next x years.

However, at some point, before too long, you'll need to start cultivating the mid-set and habits that won't ALLOW you to spend money you haven't got (i.e. use debt).

The action that is the most FINANCIALLY EFFECIENT may not be the MOST EFFECTIVE PSYCHOLOGICALLY. Continuing to rely on credit (even for emergencies) might hinder the transformation of your thinking.

At some point in the future there will have to be a bit of a trade-off between the most efficient attack on the existing debt and planning for future needs.

With £60k of debt you are going to be in this for the long haul.
You will need to deal with emergencies, occasional property maintenance needs, and schedule the occasional reward/treat for yourselves. You will need to cultivate the mindset of how to do these things without going into (further)debt. That is, by budgeting and saving. Even within a long-term debt project.

You have recognized the problem, you have a plan, you have started taking action. Well done so far!

Tuesday_Tenor

Kazza

To know that you are not alone or unique you might like to search out the thread on this forum from a few months ago, called, I think,

Totally scared and feeling sick

This was from another woman in a family with good income who suddenly realised they had £50k of debt, apparently just from 'overspending'.

£60k is an incredible amount of debt to run up, and I'm curious how it can be done without realising. You don't have to satisfy my curiosity, but I think YOU should try to be aware, in rough terms, of where the money went, for you own sakes just so the you don't make the same mistakes again.

Rather than re-typing similar questions/scenario, I've cut and pasted a post I did on the other thread. Perhaps you could ponder your own situation. To the scenario below, as I know less about your situation, I'd add other factors such as
- were you both already in debt at the start of your life together? Presumably not, or it was all cleared, as you secured a mortgage.
- are there any other underlying issues such as a gambling habit?

>>>>>>>>>> COPIED FROM ANOTHER THREAD, RELEVANT TO KAZZA, BUT NOT ADDRESSED TO HER DIRECTLY
You have clearly, as a household and/or individuals spent an enormous amount of money over the last few years.
You clearly have a problem with financial understanding, planning and control.

I think it is really important for you to analyse and understand what that £48k of expenditure has been if you are to avoid continuing in the same pattern, and if you are to set budgets and contingency buffers appropriately for yourselves as a family.

So , is it, for example, in round terms:
£12k on household improvements that someone else would have extended their mortgage for? But you've chosen to use a different form of loan. Fair enough. Especially if 0%.
£8k on valuable possessions that you now own, can enjoy, could sell if necessary. So they're assets, even if reduced value for selling on.
£10k on holidays and experiences. So you have the experience and memories. Great. But you can't indulge in the same way for a few years now.
£12k on luxuries and technology when £3k would have been reasonable given your income (if no debt). For next few years you can only justify expenditure on NEED not everything you WANT.
£8 wasted/fripperies/general living/unaccounted for. Who does this; on what? You can't afford to do this with the debt you have. You need to understand this if you are to stop it happening.

Look at it and work it out, in rough terms.

On your income you can do a lot. But you need to realise you still have to PRIORITISE. You can't have EVERYTHING you want all the time.

Good luck!

Flowers123

Good luck on your debt free journey. I've just started a diary too and it's really good motivation to keep track of spending and getting support from everyone