How to come up with a plan to tackle debt?

LittleMac13

Hi everyone!


It's the end of the year and I've decided enough is enough - I'm fed up of feeling down about the debts I have and how its affecting me.


So far, I have made a spreadsheet of what money I have coming in, what money goes out, and how much is left over. Unfortunately, I'm left with very little to pay more than minimum payments.


I have cancelled as much as I can, and also reduced my energy and internet bills. Everything else is in a contract and I won't be able to do anything until next year when those things run out (mobile phone, gym membership etc.)


I have a credit card with 4k, another with 1k, and two store cards which each have just over £400. I also have a loan which is £164pm and has four years left.


I am able to keep up with payments but really want to get those extra payments so that I have a bit of money left over for myself and my daughter.


I am a single parent working full time with a mortgage. I have tried finding a part time job however it only means paying more childcare so seems I'm a bit stuck there! My mortgage is due for renewal November 17 so I would love for my finances to look a lot better by then so I have more options!


Does anybody have any suggestions as to how I can pay these off quicker? Or how I could make any extra money? I have already sold a few things on ebay which has basically paid for Christmas (luckily).


Any help would be greatly appreciated (and I'm sorry for the essay!)


Thanks!

The_Debt_Expert

Hey, well done for deciding that you've had enough of how things are and starting to do something about it - that's half the battle.

Basically, if you can afford the minimum payments then you probably don't need a 'debt solution' so it'd be a case of overpaying what you can, when you can. Start by overpaying the highest interest debt first as this will be costing you the most money - even if the balance is lower.

Extra money wise - hard to know without knowing your situation but there are different things people can do. It's often easier to cut costs than bring more income in. Compare all your insurances and utility bills (which you've done), shop at cheaper supermarkets, get cheaper brands (by no means always worse food), cut out non-essential costs (could be anything - newspapers, tobacco, journeys where you could walk, going out a bit less). These won't all apply to you, they're just examples.

Income wise, there's obvious things like working overtime if available or get another small job, and more radical ideas like getting a lodger in for a while. Get one in for 6 months at £300/m even and that's £1800 off your debts.

If at any stage you can't meet your minimum payments after paying your bills, that's when you'd be best seeking advice from someone like StepChange.

MrsTinks

Uhmmm DE - would you happen to be connected to the website of the same name as you are posting under on MSE?

EssexHebridean

Welcome to the boards, and well done for wanting to do something about your debt!

First step is to complete your SOA (Statement of affairs) - you'll find the link to it at the top of this board, in the "Sticky" post there. If you've already put together your own spreadsheet then this bit should be relatively straightforward for you - however quite often people find that the SOA prompts them to note things they've forgotten about.

That will show you precisely you outgoings, and also what surplus you *should* have left - if you wan t to post it in to here then we can take a look and maybe come up with some additional areas you can make savings.

In terms of income boosting, there is a whole board on here dedicated to it! Obviously from what you've said, anything that means you'll increase childcare costs is unlikely to be a help, but there are lots of "at home" and spare time options - surveys won't make your fortune but will make a bit of a difference, using sites like TopCashBack if you don't already - there is even some free cash to be had there. Ebay as you say is worth a go. Take a look also at getting yourself onto consumer panels like T*sco's "Orchard" - if nothing else you'll get the occasional bit of free shopping! :T

OneLife_OneShot

I am in a similar situation. While not as much as debt yourself but the plan was still the same.

Basically what I did was set a budget for what I needed for the week. Then used the snowball calculator for my cards.

http://www.whatsthecost.com/snowball.aspx

I can see myself saving interest daily now and its a great thing.

As for making more money I would just suggest ebay and more hours if you can get them although with a child it isn't easy.

Just keep your head up and know there is an end point. I look at mine everyday with the date the snowball calculator gave me.

Good luck

enthusiasticsaver

No magic answer to getting rid of debt and yours is obviously under control if you are managing monthly payments. As you say though that money is better in your hands than your creditors so a plan to get rid is good. Start with most expensive debt and throw any spare cash you have from selling stuff or as contracts for things finish towards this. When this finishes tackle next most expensive debt. Storecards might be easiest to tackle first as they are small and usually expensive. Post an soa up so we can suggest cost cuts.

LittleMac13

Thanks for the replies, everyone!


I'll fill in the form and upload it, any help would be appreciated and thanks for your thoughts so far :-)


Currently have my old car still in my garden that I as soon as I have the money to put it through its MOT, could get me about 1k (fingers crossed, depending on how much it costs to get it sorted!) Hope that one comes through for me.


Thanks again :-)

The_Debt_Expert

MrsTinks wrote: »

Uhmmm DE - would you happen to be connected to the website of the same name as you are posting under on MSE?

Haha, I didn't realise there was a company called Debt Expert! No, I'm nothing to do with them :-)

ReadingTim

• spend less than you earn

then

• work out ways to spend less than you currently do
• work out ways to earn more than you currently do
• work out ways to pay less interest than you currently do

The time it will take to get back in the black all depends on the savings you can make - it's basic maths, not magic. For example, if you save £50 per month, it will take 6 months to repay £300 (assuming no interest). It cannot be done in 3 months, unless you save more - £100 per month.

EssexHebridean

The_Debt_Expert wrote: »

Haha, I didn't realise there was a company called Debt Expert! No, I'm nothing to do with them :-)

Possibly a good idea to either request a change of username so you can't be associated with them in other members eyes, or at the least to clearly state in your signature that you have no connection.

EssexHebridean

LittleMac13 wrote: »

Thanks for the replies, everyone!


I'll fill in the form and upload it, any help would be appreciated and thanks for your thoughts so far :-)


Currently have my old car still in my garden that I as soon as I have the money to put it through its MOT, could get me about 1k (fingers crossed, depending on how much it costs to get it sorted!) Hope that one comes through for me.


Thanks again :-)

On the car, have you looked to get quotes to sell it as it is? Might be easier and quicker than waiting until you can get the work done, and with the situation with your debt currently, the money might be better used there? Cars generally speaking don;t much like sitting around doing nothing, so almost certainly at the moment the costs to set it to rights are just increasing.