What methods do you use

livingbeyond

I am wondering what methods people use to deal with their debts. I have admitted (yesterday) that I have debts totalling approx £27,000. This debt is over several items (car loans, CC, personal loans). I can manage the monthly outgoings at the moment but realise I need to do something about my spending and rising debt level. I have decided to tackle the total in more realistic targets. I have gone for £1000 off my debt by end of the year. I will then decide on the £1000 target time scale (eg lengthen or shorten) depending on my results for the first £1000. I feel it might make the challenge easier, instead of taking on the mountain in 1 go, I will break it down into 27 stages. What do you all think, or am I just convincing myself here!

hypno06

Def split it into smaller steps - the size of those "chunks" depends on you really and what you feel comfortable with.

At the beginning of this year, my remaining debt stood at about £50000. This is a huge amount, but I decided to break it down into 1000 chunks of £50.

So all I had to do was to make/pay off £50 a thousand times.

I can visualise this much easier -

1 x OH overtime shift = £50
Ebay target per month = £50
Cancelled the gym = £50 per month
Taking a second job = £50 per week

etc etc Thinking of it in £50s is much more realistic for me - I may not be able to see how I can raise £50000 but I can see how I can raise £50.

It must be working - I have paid off over £9500 this year so far!!

silkglade

Hi and welcome to mse, congratulations on taking that 1st and most important step.:j

1st I would post your SOA on this thread, that way we can see if there is anyway we can help to cut back on the regular monthly outgoings.. You;ll be supprised.:A

2nd I would advise you to keep a spending diary, put EVERYTHING you spend in it. You will be really supprised how much is wased money on things you don't really NEED. :eek:

3rd, I would probably concentrate on 1 debt at a time, if you do this then you will start having more money to throw at the remaining ones, It is a real incentive to keep you motivated.:D

Keep a debt diary on here, you will get lots of help for the wonderful people on here and when you have those DOWN FEELING moments you will have the support you need from people HERE that are also going through the same as you at the same time and understand what it is like.:beer:

Dont suffer in silence, it's not worth it.

Oh and GOOD LUCK

Fortheloveofmoney

When I started out I had a debt of around £30,000. Half of which was a loan and the rest was on credit cards and overdraft. This debt was spread over 4 credit sources

Due to the size of each debt it had taken ages to get just 1 paid off and the motivation has been difficult.

Today I have 1 credit card, an overdraft and the blasted loan. Unfortunately I cannot over pay on the loan so other than pay the £428.77 per month I pretty much ignore it and concentrate on the overdraft and the credit.

I have been fortunate enough to still get good deals on credit cards and bank accounts so have moved my money around lots to ensure I get the lowest APR's etc.

My overdraft is now with the A&L and is interest free until April 2008 so I have been ignoring this one and focussing on paying off the credit card (also 0% until the 23rd of this month)

I am pleased to say that the credit card will be fully paid off by the end of the 0% deal and I can then concentrate on the OD.

As I have the 0% OD until April, I have decided to put the money I have been using to pay off the credit card into savings account at 6% until the last possible moment in April and then use it to pay off the OD in full.

I will then concentrate on saving money to pay off the loan early. Although I've yet to work out whether this is worth doing due to the penalty charges.

Sorry this has turned into a long one but what I am trying to say is that this site has helped with motivation and has also given me so many ideas on how to manage my money. So stay with us and we'll all help each other.

Good Luck!

Karmacat

Hi fortheloveofmoney

Great post above, thats exactly the right concept, you sound like you discovered it on your own. The name is snowballing, and there's a free little doohickey to play with at whatsthecost dotcom, something like that. I tried to put it as a link, and it didn't work, but if you google it, you'll find it.

I agree with the recommendation to put your soa up. If you really don't want to, at least go through other people's, and look at the comments that have been made, its really illuminating.

Good luck

Shineyhappy

I think that you need to decide what works for you, lots of us on here have different ways of dealing with it, whether its aiming to get your debt down from say 25k to under a 20k milestone works for some whilst I have known people to make a chart of their total debt where each square represents an amount say 500 pounds and when they have paid off that much they colour in a square.

Personally I was trying to shift my OD, then MS annoyed me so I have decided to try and shift that, basically I am disorganised with a tendancy to change my mind about what gets paid extra that month.

I try and stay motivated by telling myself that I am doing the easy debts first as my OD and ccs are nothing next to the mortgage and I find that this motivates me to want to get on with sorting that out.

tooties

very interesting thread thanks op,
i also struggle with motivation as my debt are all individually large and cant shift them in one go so have to try and save to pay them off, im enjoying reading everyones strategies hopefully i will learn some new tricks so keep them coming folks
regards
tooties

Lucy1982_2

I have written myself out a plan.... Including motivation 'you can do it's' which lists everything, all outgoings and incoming.

With the amounts left over I am going to throw at extra debt repayments. I also have given myself a realistic amount of 'spends' money. Which I have then broken down into days so I am allowed £2 per day on a working week and £10 per day at weekend.

Any money that may be left over at the end of the month will be paid off a debt. I'm hoping that it will be enough of an incentive to stop me spending!! I'm not sure if it works yet as I don't get paid until next thursday so we shall see.

vix1978_2

Lucy1982 wrote: »

I also have given myself a realistic amount of 'spends' money. Which I have then broken down into days so I am allowed £2 per day on a working week and £10 per day at weekend.

Any money that may be left over at the end of the month will be paid off a debt. I'm hoping that it will be enough of an incentive to stop me spending!! I'm not sure if it works yet as I don't get paid until next thursday so we shall see.

Sorry to hijack, but this sounds like a really good idea. One of the things I struggle a lot with is my 'disposable' spends money, especially as a lot of my debt is credit cards and I'm used to just spending. I might try this myself as those amounts seem totally reasonable and I can carry over and nonspends till the end of the month. Thank you. :T

CharliesAngel

Working three jobs.... not going out, not eating out... you get the gist lol...

I also throw everything I can towards paying off, no matter how small.. whilst playing the old shuffle game and reducing interest rates where possible..

Asda deliveries (with free delivery vouchers), meal planning and not driving like a lunatic also help...

hope to be rid of them before 2010... (see sig).

CA x

auntie_brenda

What keeps me motivated is spreadsheets & graphs - lots of them!

Analyse your debt on a % basis. So x card is 23%, y card 15% and so on. Then when you make repayments you can analyse in lots of ways - so £500 may only be 2% of overall debt but 15% of z credit card etc. Since you started you have paid off 4.5% of overall debt which may not be much, but is higher than inflation etc etc.

Do a graph for each card, 1st target is when the lines meet, when debt owed = debt paid.

Put all your stats into https://www.whatsthecost.com, this will prioritise your debts and give you a debt free date. Then aim to reduce it. I also have worked out me debt free day and how much I need to pay a month to be debt free by then. Every little overpayment reduces the monthly amount needed to service debt.

Just a few ideas....... am going to get out more now