Clearing £26k of debt plan

jackieblack

Ben_184 wrote: »

Apologies if I didn't make clear in original post; I am still living at home so have no committed expenditure for rent or food right now

Well, each to their own (and presumably your parents are happy to keep supporting you, despite the fact you're supposedly an independent adult) , but IMO if you're earning £1400 a month after tax and not paying anything to your parents for board/bills or food, that's taking the P, quite frankly.
Good job you're not my child!
For my own self respect I couldn't freeload on anyone like that.

copperman05

I am/was in a similar position to you. My advice would be to start using a decent budgeting software like YNAB (YouNeedABudget) as it stopped my frivolous spending overnight and makes me very protective of money set aside for debt repayment.

As far as how to repay, I have a slightly different opinion to others, my opinion is that debt needs to be attacked with all youve got. You (and I) had the fun creating the debt in the first place, now is the time to tighten the belt as much as you can and pay off this debt as fast as you can. As Dave Ramsey says (I always seem to mention him, look him up) you can wonder into debt but you cant wonder out. Some shorterm sacrifices now will lead to a MUCH better situation in the future. As far as I'm concerned debt needs your attention and motivation like it is an emergency. As your are still at home and not paying for living expenses you should be able to attack this debt fairly well.

I would use most of your £6000 savings to pay of some of your debt and keep 1 or 2k for an emergency fund. Not doing this is just going to cost you in interest over time and you'll be in a much more effective position to save for a deposit later/quicker.

For me despite some sacrifices I actually find paying off the debt in this way very rewarding and the sense of finally being in financial control extremely satisfying.

Good luck

Ben_184

Hi all,

Sorry for the delay replying. Had a busy few months, and have moved out and am now renting.

Money is very tight at the moment, and I'm having to cut back a lot to make it all work. Current budget is roughly as follows:

Income: £1,350 (changes to company car tax this year have reduced it a little)
Rent: (£500) (Includes all bills)
Credit Cards: (£250)
Gym and phone: (£100) (This is partly instead of 'date nights' with my partner - we train together)
Petrol: (£200) (This is a budget, and at the moment is quite a bit less than this)
Other Expenses: (£100) (This is a general allocation to take into account things like monthly bank fees etc)
Disposable income: £200

As you can see, things are fairly tight, but I am expecting a significant payrise in October; perhaps as much as £300 per month after tax. I am budgeting £60 per week for food and 'date nights', taken out as cash every Friday and put into a money jar (Both of us do this). At the end of each month, we will see what's left over (it's not a target) and can use this towards repaying some cards off (and her for whatever she likes). This works out on average £260 per month, so eats into my reserves a little. But I want to be able to live life as well at the moment, knowing that my net debt is still being reduced gradually, all on 0% until at least next year. I've also noticed an improvement from 'poor' to 'good' on my credit score!

I have also begun doing 'matched betting' with my partner. I am very experienced in this, and this will be our holiday fund, or perhaps for other big splashing out events. Who knows. But essentially, I have £500 of my own money in there, and am aiming to build this up to £1,000 in the next month or so, and over time to several thousand once I get into the swing of things. I anticipate that perhaps £300 a month is a realistic and achievable target, so we will still be able to enjoy life by using matched betting, or even use this to pay off some cards



My current budget strategy is really to give my bank card to my partner, and only withdraw the £60 every Friday. That way there's no other spending. My petrol goes on a corporate Amex card, which I can clear off every month; absolutely no personal expenditure is allowed on this card except petrol. We do all our food shops in Aldi now, so will struggle to actually spend £30 a week each on food! Date nights are 'taste card' specials, cheap thrills or freebies. So the £30 a week each should do us nicely.

Let me know if anyone has any suggestions or tips! It's hard at the moment knowing that so much of my income goes on rent and credit card repayments... But I'm glad we have moved out together, despite the financial constraints. No moaning from us - the future is looking up!

Ben_184

jackieblack wrote: »

Well, each to their own (and presumably your parents are happy to keep supporting you, despite the fact you're supposedly an independent adult) , but IMO if you're earning £1400 a month after tax and not paying anything to your parents for board/bills or food, that's taking the P, quite frankly.
Good job you're not my child!
For my own self respect I couldn't freeload on anyone like that.

I think my budget did exclude it, I was mainly concerned with 'committed' expenditure, and while that is expenditure, I guess if I'm in trouble I can always tell them and stop paying! Can't do that with a bank though...

Totally agree with your post, even though I may have my own mess to deal with, it's not fair to have someone else subsidise that. No such thing as a magic money tree, just stealing from someone who has earned it to give to someone who hasn't

dionysia

Welcome back! It's great you and your partner have moved in and sounds like good things happening in your professional life too!

And now the hard bit ... or good news depending how you look at it! After rent/bills and cc minimums you've got £600 over which isn't all that tight, and if the payrise comes through you'll be in a really good position. How much do you owe now?

SavingAtNumberTwo

Welcome back Ben and congrats on the new place