Preparing for new chapter in my life

Lyntonian

Been reading all the interesting posts on the forum for a while and decided it's time to take the plunge and start my own diary.
A bit of background to myself. I am approaching 60 and due to ill health I had to take early retirement from a well paid job a couple of years ago. My private pension lump sum enabled me to pay off my mortgage. I currently work part time which together with my pension enables me to pay my bills. Unfortunately my health is deteriorating and I will have to give up my job in the near future.
My plan is to sell my house next spring and downsize. This would free up about £40,000 in equity which together with lower outgoings should enable me to live on my private pension until my state pension is payable in 6 years time.
Unfortunately I have built up several credit card debts over the last 2years. This is due in part to helping my daughter with her wedding expenses but mainly due to not adjusting to a reduced income and still spending at my old levels. I have finally realised the error of my ways and for last 3 months have drastically reduced my spending.
My aim is to pay off my credit cards by Christmas so that when I put my house up for sale next year I do not need to dip into the equity to pay off my debts.
All I have to do now is work out how to do it. I have very little left each month after my bills are paid. Going to start a spending diary on the 1st for a month and see where I can cut back.
Sorry for the long post but needed to commit myself to solving my debt problem so I can move onto the next chapter of my life.

parsniphead

Good luck with your journey Lyntonian.

You will gets loads of support and encouragement on here so keep posting.

Hiddenidenity

Hello and welcome

I'm not the best at advice but will be here to push you along and show my support

First things first, you realise the problem. Now you need to do a SOA and keep a spending diary to see where every penny goes. Then you can see where you can cutback/where you are over spending.

Good luck

Lyntonian

Well this morning I have had a good look at my bank account and realised I am paying for privilege of having the account, paying for privilege of using my overdraft and paying interest on the overdraft.

. For last 3 months I have stopped all spending on this account other than direct debits. My pension goes into this account and all my bills are paid from it. The amount going in covers what is going out with a little left over for emergencies. This means my overdraft is not reducing and with the charges is actually increasing.

So I have just changed to a none fee paying account as I don't use the "benefits" included. I have also paid off overdraft with a 0% credit card and set up direct debit to pay it each month so I don't forget. I plan to leave this bank account to tick over without me touching it and just use my other account that my part time wages go into.

My 4 credit card debts are
Credit card 1 £723.50. £500 of balance on 0% until May 2018
Credit card 2 £181.05. 16.9%
Credit card 3. £3089.70. 0% until Aug 2018
Credit card 4 £2300. 0% until Aug 2018
Total debt. £6294.25
I plan to start with credit card 2 as that is only one I'm paying interest on. Then credit card 1.

Will try and do an SOA tonight. Not looking forward to that at all.

Lyntonian

Well a nsd today. Didn't get round to putting together an SOA but have sorted out all my paperwork and started to get numbers together.
Feeling positive that I can succeed this time.

UncannyScot

Hello and welcome

Looks like you have this well in hand, keep it going and you will succeed

enthusiasticsaver

You have made a good start. It can be a financial shock moving to a reduced income and the thing about retirement I have found that having more time means the temptation to do things to spend money is higher.

You are doing the right thing by cutting as much as you can and budgeting tightly. Sorry your health is not good. Can you claim any benefits when you give up work or is your pension too much?

Lyntonian

Unfortunately my pension is too high to claim benefits. I'm hopeful that by cutting back now and reducing my debts I will be able to live a reasonably life once I downsize.
I don't live an extravagant lifestyle. My only treats tend to be a coffee and cake out with my daughter once a week.
Having said that I do travel to Ireland once a month for a long weekend visiting my other daughter and grandchildren. I am reluctant to give this up as they are my only grandchildren and I feel it is important to be a physical part of their lives and not just on end of a phone. My only expense is air fare and train. This averages out at £100 a month.
Hopefully I will be able to continue with my visits or if really necessary I could maybe reduce to every 2 months.