Tired of Being Boracic Lint

Bird.Heart.Mouse

Hi everyone,

My partner (nicknamed Mouse) and I finally turned into what we have been calling 'future us'. The last few years have consisted of limited to uncontrolled spending on credit cards and extended overdrafts, with a blind faith that 'future us' (the older, wiser, future incarnation of ourselves) would deal with our financial woes. This year, after the clock struck 2017 I was hit with a realisation: I am so tired off being skint!

As a result of expensive debts, so much of our wages go toward paying interest to banks and credit card companies, and frustratingly we are left with much less money then we should be. Our current situation is not a fun read, however I'm determined to get on top things:

Credit Card 1: £4,157 (25.9% APR)
Credit Card 2: £12,168 (18.3% APR)
Overdraft 1: £2,100 (19.94% APR)
Overdraft 2: £900 (19.94% APR)
Overdraft 3: £1,000 (19.89%APR)
Overdraft 4: £550 (19.89%APR)
Loan: £1,049 (18.3% APR)
Total Debt: £21,924

I have already taken some positive steps to getting things sorted, thanks to the great advice on the MSE Website:

• Put together a complete budget to see all debts, incoming money and outgoings (something I've been so ignorant about for a long time!)
• Applied for a 0% balance transfer card which will move our most expensive debt £4,157@ 25.9% APR so we can start to properly pay it off. (Now waiting for the card to arrive)
• Haggled Sky down from £70 p/m to £33.40 for around the same service (ditching rubbish like a surcharge for 1471 which was never used!)

Now looking to see what further reductions I can make, e.g:

• Planning to reduce overdrafts month by month
• Moving more of that expensive debt to a 0% if possible
• Setting up an Xmas fund now

Taking one step at a time! Getting us to a debt free position is going to be a challenge but I'm (finally) ready to tackle it head on.

Bird x

Bobarella

Good luck Bird, you have taken the first step anyway, here's to moving forwards!

Bird.Heart.Mouse

Many thanks Bobarella!

EssexHebridean

Nice work - and welcome aboard!

There's something brilliant about having that total switch of mindset that leads to you discovering that actually, you're not just "someone who's bad with money". The next "wow" point is when you realise quite what a difference you can make in your finances within a short space of time, too!

Drawingaline

Hi, we have a similar amount of debt (although on much lower Apr) and I have been massively overpaying it over the past three months. The sense of achievement watching the figures falls makes it a little bit addictive!

Good luck

Bird.Heart.Mouse

Happy Tuesday all,

I'm currently (impatiently) waiting for my MBNA 0% balance transfer card to arrive before making a proper debt repayment plan. I have done a monthly budget which feels fantastic and controlled, but this isn't providing me with a view of the finish line (no matter how distant!).

In an attempt to keep motivation up I have decided to work out when my debts will be paid off. Here goes:


1) Creation Credit Card: £4,157 (25.9% APR)

• Current Repayments: £135 p/m
• Total Repayable: £6,388 (+£2,231!)
• Debt paid off by: January 2021 (48 months)
• Current thoughts: 0% balance transfer card due (hurry up MBNA) so watch this space!

2) Barclaycard: £12,168 (18.3% APR)

• Current Repayments: £296.70 p/m
• Total Repayable: £18,324 (+£6,156!)
• Debt paid off by: March 2022 (62 months)
• Current thoughts: Holy s**t!!

3) Overdrafts: £4550 (19.94% APR)
Overdraft 1: £2,100 (19.94% APR)
Overdraft 2: £900 (19.94% APR)
Overdraft 3: £1,000 (19.89%APR)
Overdraft 4: £550 (19.89%APR)

• Currently not repaying these as I'm focused on the credit cards
• Current thoughts: Not sure what to do here....

4) Loan: £960.07 (18.3% APR)

• Current Repayments: £103.97 p/m
• Total Repayable: £1037 (+£77)
• Debt paid off by: December 2017 (11 months)
• Current thoughts: This is Mouse's small loan which I'm planning to let be and pay off over this year

Question to the forum: Should I be planning to reduce my overdrafts each month, or just focus on the more expensive debts??

Appreciate any advice,

Bird x

Bird.Heart.Mouse

Hi Drawingaline - great to hear you're attacking your debts head on, great work :T

You've nailed it, the APR is such a killer. Just spent some time working out what it's costing to with the crazy rates, so far up to over £8000 on interest alone :eek: Bal Transfer plan is in action...

All the very best,

Bird x

Bobarella

Just looking at your list, is there anything to be gained from early repayment on the loan? Sometimes there is with the interest.

With the overdrafts could you knock £50 off a month and ask the bank to drop the limit as you go on say one of them?

System

Welcome - we have a similar debt level to you. Looking forward to joining you on your journey. We got to the sorry state of not being able to afford repayments though - so well done to you for having your LBM now before it is too late!

Do you know how much £££ you will get on your balance transfer card? I think i would try and clear one card and one overdraft into that so you can start operating with your shiny new budget in a "good" account - makes it much easier not to fall back into the O/D.

Have you used a snowball calculator yet to work out the best way of reducing it all?

One of the other approaches is to ignore the APRs (but move what you can to 0% obviously to reduce interest as much as possible) - and just go for the lowest amount due - and pay that off quickly - so if you could make overpayments on the smaller loan and clear it even before the end of the year, this would free up £103/month to throw at the other debts? Psychologically this approach is supposed to work well, as you quickly see progress and get spurred on by your success (rather than chipping away at something and seeing little results)

One of the hardest lessons I have been learning is about proper budgeting - and that's not just budgeting for the bills that go out each month, but saving up for things that don't go out by d/d- e.g. putting something away each month towards vehicle repairs and maintenance, starting an emergency fund, or saving for christmas. My advice would be to make sure your budget factors these things in as a form of future debt protection. Then with whatever you have left, chuck that at your debts.

Also, it wouldn't hurt to budget something for you both as a treat - be that a holiday / or a nice couple of days out. Paying off debts is HARD WORK and if you can reward yourself along the way it will make the journey less tedious!!

System

Bobarella - great minds!!

Bird.Heart.Mouse

Bobarella wrote: »

Just looking at your list, is there anything to be gained from early repayment on the loan? Sometimes there is with the interest.

With the overdrafts could you knock £50 off a month and ask the bank to drop the limit as you go on say one of them?

Hey Bobarella - after comments from you and ramblehan I am now planning to tackle Mouse's loan - that extra £103 per month will absolutely help. Spoke with the bank and they are happy for the loan to be settled early (we could "even save some money" if we settled early - well thank you Mr Bank Manager :rotfl:)

Bird x