Are there any standard first steps to being debt free i should know?

rb6k

Hi, what i mean by the title is what are the key elements people have implemented into their saving when they began trying to be debt free. I need some form of list of fundamentals so i can set myself going etc.

Between me and my partner we have a reasonable ammount of debt although it is mainly student debt therefore most of its interest free. How ever! I was at Uni for 2 years before quitting and whilst there i actually signed up for two student over drafts, i was told a few months back by a friend this is actually not allowed?! Banks never told me that so what can i do eh? Well anyway i have one with NatWest and 1 with the Halifax, the two combined mean i have about a £3000 over draft which is at its limit. On top of this my partner has about 20k worth of student loans, although i believe 6k of these loans is a HSBC loan, although it may be less. She also has a credit card and is in the trap of paying off the minimum monthly repayment, when she told me this i was :eek: but we cant afford to pay it all in one go.

My understanding is that my overdrafts do not *need* repaying urgently they are 0% interest and the banks have not sent me any notices to say otherwise. I am worried however that the fact i am not a student will make them ask for money back or that they will begin charging me interest because of this, and this is hanging over me like a blade. Do i tell them and risk being cut up by the interest or do i keep quiet and focus on our other problems.
The loans have installment plans so should be ok, but is it ever possible to pay loans off early?
The credit card, now i am thinking this is clearly the priority if we are to stop some un-neccesary spending, do i focus all my efforts on this one (which i guess if we really cut back we could have gone in 2-3 months) and ignore the others for the time being?

All i have come up with so far to pay back all this money is working over time when ever i can, now my plan was to work overtime and put about £250 a month into my overdraft account, would it be better to put it on the credit card or would it be better to save it then try and pay off the credit card off in one go etc?
Are there any other ideas people can think of for getting more out of our money than doing over time? We've already sold most of our sellable items on amazon/ebay and at boot sales so we could move house.

I know i probably sound like a fool as im probably not doing half as bad as most on here, but i want to get this money sorted out so that i can begin my life properly. I have aims i need to achieve such as proposing so i can marry my partner, buying a house and having kids, i cant do all this with debt hanging over me and need to find ways around it or through it to get things done asap.

Any help/advice is much appreciated, thanks!!

madmoney_2

Hi There and first of all welcome to the board!!
You could do with popping up an soa (see southernscousers sticky at the top of the board for how to do this), then we will be able to help more
mm
xxx

rb6k

Thanks!!

Monthly Incomings:

My salary varies from - £1000 - 1350 depending on add ons (can be higher if i do better but its rare!)
Partners salary - £750 without over time
Benefits - £0

Total - £1750 plus add ons depending on overtime/commission

Monthly Outgoings:

Mortgage/Rent - £595
Council Tax - £105
Gas - £30
Electric - £25
House Insurance - £15
TV License - 30 i believe although im not 100% sure...
Sky £51 including tv phone and internet
Phone - £11 line rental, £10 my p+g and £30 O/H contract
Food - £150
Car Insurance - £60 i believe, i dont drive but my partners recently went up by quite a bit!
Petrol - £100
Loan - £250
Bursary repayment - £30
Credit card - £15
Pet Insurance - £7
Odd days/weekends a month - £100

Total: £1,614

Now i must be missing something because i can safely say that we have not had a penny left each month by pay day since we'v met! This even includes months where we get more because of overtime/comission although granted we have just moved which has cost a fortune, we are renting unfurnished and had to buy new furniture!

Im sorry if i look a bit silly, things may improve by themselves a little as the months go by because we wont have to pay out for new things like washing machines etc, but it definitely feels like we have got to sort out our spending, there IS still over 23k debt there to be paid off and i want it to go away asap

Just to add, my overdrafts combined are 3000 and the loans combined are about 20, the credit card is about 600 and we kind of owe parents a fair bit too really although i think they are writing that off for us!

Karmacat

Hi there
You need to write a spending diary! Put every little bit in, as well as the big stuff. The newspaper, the chewing gum, the packet of crisps when you were starving, everything. Do it for at least two weeks, preferably four, and start to look at it as soon as you can - that will tell you where the extra money is going. And then, when you *know*, you can start to do something about it. Best of luck.

rb6k

Nice one, knew id get some good advice if i asked! Cheers Im reading through the cut back hunt at the moment, so many pages!!!

Jacks_xxx

:wave: Hiya sweetie!

I don't know if there are any official recommended steps, but these are mine:

• Get all the figures out in the open. Find out what your unavoidable monthly outgoings are - to the penny. Find out exactly what you're being charged for your debts, and get it all down on paper to refer back to - and add to as you remember things you missed at first. Post it on here as an SOA so that we can help with the next part.

• CUT those unavoidable monthly outgoings! Find the best deals for gas /electric /insurance/ phone/tv/internet, and as far as possible change over using the Quidco site so that you get some cash for switching as well. Decide if you really need to live in the 4th most expensive postcode in the country / two mobile phones / a big Sky package / the fastest internet connection available / disposable contact lenses / two cars / this particular car / whatever!

• Cut your food bill. (Unless you're living on 9p noodles and the veg from your own back garden it can always be cut back!) Get over to the Money Saving Old Style Board and get loads of ideas for making your food budget go further. Keep your shopping receipts for a month, and then join the next Grocery Challenge and spend less than last month.

• Keep a very good eye on your incidental spending. A spending diary notebook is a really good idea. Some people also track their spending online at http://www.spendingdiary.com/

• Check your debts are costing you as little in interest as possible. (0% preferably) Then check that you're paying them off in the most efficient manner by punching in all the info into http://www.whatsthecost.com/snowball.aspx

• Amazon / eBay everything that's not nailed down. Books dvds, free cds they give away in the paper, clothes you don't wear any more, and junk you were going to throw out will all probably sell to somebody! What stuff have you got in your parents garage, your old bedroom, the attic, or spare room? Sort through all your books, dvds and clothes and be ruthless about what you use and what's just taking up space. (Textbooks do pretty well on Amazon.)

• Join the community here at DFW Get help, support and keep your eyes focussed on your debt free goal.

Will that do you for starters???

Love Jacks xxx

DisillusionedAnna

Or6bk

good luck on begining your Debtfree journey, Im just about to do this myself after my Lightbulb moment of looking at my total debt:eek: :eek: :eek: :eek: .
Jacks thats a good list to be starting with, Ive been dithering try to put the bones and basic structure to my SOA and Sothernscousers sticky is brilliant too.
My inspiration to get off my !!! and sort myself out has been Immoral Angels Diary, read that r6bk , theres a dedicated lass with two kids, a nice hubby and a brilliant approach to being Debtfree.
Lightbulb moments and staring at your SOA amount has given me an unconfortable feeling, but one that has tio be addressed before I can move on, debtfree, and start to live my life as I want:D
So good luck and I`ll be watching and acting on some of the advice you will be getting
Best wishes to all...this Debtfree journeys not going to be easy but with the help and support radiating from this site its achievable and do able and Im going to do it:D :j Anna

OberonSH

Have you tried putting all your debts into the snowballer (www.whatsthecost.com) and seeing what it suggests as to order of payments? I personally would get anything with interest accruing got shot of first - why pay more than you have to?

You don;t mention, but is OH with you on this? You need to be pulling together otherwise any money being saved by one is being spent by the other.

chevalier

Is you OH under 25? If not £60 a month for car insurance is way too high! Have a look on moneysupermarket.com for a better quote, then if you find one, do one of two things, go to the current provider and see if they will price match. If they won't then switch, but remember to go via www.quidco.com as you then get cash back on the insurance too.

There are a lot of sites on the web that offer money/or points to do surveys, or searches. If you want my (not definitive) list then pm me
chev

My guess is that the supposed spare money you have is being eaten up by what is not on your SOA ie
car tax, MOT, servicing, savings for xmas or birthday, clothes buying, dental/glasses/ prescription charges

rb6k

Hey there, we are both under 25, im 22 shes 24 in November, Her insurance is still high, trouble is she doesn't have long until she has 1 year NCD and i work in insurance so i know its worth her getting that 1 year then il be able to get her a good deal at work etc
Thanks for the suggestions thus far, my O/H is very interested in this too i just didnt know how she would feel about me baring all on the internet about our finances hehe, i told her last night n shes fine with it, anything i put forward she will be happy with and vice versa, the money diary is a definite good idea thus far. Im quite excited about this pay day as there is nothing pressing to be bought/paid for other than the bills (how lame is that sounding?!?!) which means i might just be able to take a huge slash out of the credit card, we were discussing that last night also and decided its priority number 1.

Do any of these point/money websites work well? I did sign up to a couple an age ago but they never gave me surveys to do there was one at uni where i spent a year working towards a bloody £20 amazon voucher, got 2 points away and they stopped sending me surveys, what a jip eh?!