FourthTimeLucky's 4th attempt to become debt free

fourthtimelucky

Hi all, thanks for taking the time to stop by and have a nosy at my diary.

This is my third or fourth attempt at clearing a nagging debt that has accrued steadily with very little to show for it. Before I explain where it came from I will put the figures out there so it is out of the way.

Unsecured loan - £10,760.80 (40 payments remain – last one December 2019)
Barclaycard - £1,102.65
MBNA Credit Card - £1,989.93

The unsecured loan is with my bank and was to consolidate previous debts on a lower interest rate. I stupidly didn’t include the two credit cards that were 0% so rather than having one payment I have three outstanding debts. Barclaycard remains at 0% and I have a standing order of £100.00 in place which means it will be cleared July 2017 as it stands. The MBNA is at a standard rate and I have recently been clocking up extra spends on which I need to put a stop to. I have just this second cut the card up and popped it in to five different secure waste sacks in my office!

I plan to leave the loan to its own devices for now as the payment comes out of my account on payday. I also plan to leave the Barclaycard at £100.00 per month as it remains interest free for the life of the balance.

My first decision is whether to transfer the MBNA balance to the Barclaycard where I have a 0% offer for fifteen months with a 2.9% fee (which would equate to £57.70). I am currently making minimum payments of around £40.00 and the interest is around the £25.00 mark each month so I am leaning toward making the transfer and closing the account down. In the past I have been guilty of keeping the card and account ‘for emergencies’ which obviously leads down the wrong path.

Having reread when I’ve typed so far I am pretty sure that transferring to 0% is the way forward as the balance transfer fee is just over two months’ worth of interest alone.

My circumstances have changed somewhat in the last three months. I now live back with my parents which whilst not being ideal in my mid-thirties does allow me to attack these debts with my outgoings somewhat reduced.

I will be attacking them a little less full on that some of the people here on the boards. I have had a pretty grim few months and have decided to allow myself to enjoy myself a little whilst addressing the outstanding balances. That said, I am not going to book for a month in the Bahamas; just allow myself some of the things I already have in place such as a tennis club membership, a football season ticket and some pre-planned trips away (within the UK).

I plan to adopt the MSE mantras and reign in my often unnecessary spending. I have an addiction to eating out, whether it be restaurants or lunches at work. I totalled up a weekly spend last week and it came to over £70 with two meals out and four out of five lunches at work. Whilst every week is different, it is sobering to know that at that rate I would be spending £3,640.00 a year.

I will update as often as I can and also want to get involved in and around the boards again. I used to be quite active on a previous username so will do what I can to contribute. Thanks again for reading.

fourthtimelucky

Back again with another post.

Just to add some meat to the bones; I work full time earning around 30k per year. My outgoings are the loan, sports and gym membership, car insurance, child maintenance, Amazon video, a mobile phone contract, token rent and vehicle recovery. My phone contract is due to end and I'm mulling over going SIM only which could more than halve my payment.

I do some freelance writing occasionally and have emailed previous editors to make some new pitches for next month. Fingers crossed that will bring in some money. I've also made a claim for delayed flights under the EU delay scheme. It is borderline but for the price of a stamp it's worth trying.

Karonher

Good luck with the writing. I do a little but it is very small articles that pay a few pounds.

You will probably feel better with one card gone.

By the way, which team is the season ticket for?

fourthtimelucky

Thanks for the reply. I am 99% certain I will do a balance transfer and get rid of the second card. The fee only equates to two months interest so it makes sense.

For my sins the season ticket is for Newcastle United; currently adjusting to new surroundings in the Championship!

fourthtimelucky

Forgot to mention that I have a minuscule savings pot that currently stands at £145. I know the mantra is to pay debts with savings but I think I will stick with this. It is a regular saver with my bank and will be £355 minimum when it finishes. It is one of the few decent places left with a reasonable interest rate and psychologically I think it benefits me to put money aside and leave it untouched.

I am going to take myself over the the challenges board for a nosy and see what I can get involved in.

fourthtimelucky

Small update for today.

I took some trousers back that I bought in two sizes (good news being the smaller size fitted) and got a refund on those (£20.00) and also was paid £23.15 x2 by friends for train tickets I bought last month. £66.30 that I hadn't accounted for that I will use to make an extra payment from the MBNA card to reduce the balance before I make the transfer.

dawnybabes

Small steps make all the difference

rockabillygirl

Didn't want to read and run. Good luck on your debt free journey.

fourthtimelucky

Thanks for the replies folks.

I had a relatively cheap Bank Holiday weekend which makes a change from the norm. Also tomorrow is pay day and I am not in my overdraft so the frugal approach is paying dividends already.

I have today requested to transfer the balance from my MBNA card that is accruing interest over to my Barclaycard where it will be at 0%. The fee was more than I had hoped as the offer changed from 2.9% to 3.9% from when I last looked but it will still be much more beneficial in the long run.

Perpetual_Miser

Good Luck! You are in a very similar position to myself, so I'll be following closely.

fourthtimelucky

Hi again. Bit of an absence as things have been manic but thought I would drop a quick update in. A little bit of bad news is that my debt total is slightly higher than I thought as there was a payment taken on one of the credit cards for a hotel stay that I already thought had been taken.

I have transferred the balance from the card with the interest (and cut it up in to a million pieces before cancelling it) so the two figures are

Unsecured loan £10,491.78 (39 payments remain)
Barclaycard (0%) £3,353.62
Total - £13,845.40

It is a little bit of a set back to only be £7.98 better off than last month but I have now removed any interest from accumulating which will make a big difference. Just to demonstrate, the interest last month on the card that was cancelled and cut up was over £60.00. This means the balance transfer fee pays for itself after only one month.

I have also started a sealed tub with an open date of November 2017.