Conquering the debt mountain!

Mr-SJ

Hello,

Long-time lurker, first time poster so be gentle.

Currently facing into quite a debt mountain and thought it might be cathartic to share the struggle – the stories here are inspirational!

My wife and I have been together three years, married for one. When I met her we bought into the relationship £22K of debt between us, a mixture of student related debt and cards.

Over the last three years, the wedding and lots of lovely holidays has meant our debt is now teetering over £55K – we’ve been totally irresponsible and I’m ashamed it’s gotten so bad. It has only been a recent mortgage application (we currently rent) and the scrutiny of our finances that has bought everything into sharp focus and quite how far beyond our means we’ve been living.

Through inheritance, selling our main car and saving we’ve managed to scrape together £17K deposit for a £160K three-bed semi which completes in a few weeks. I really want the house purchase to be the turning point where we start to properly address the money we owe.

Over the last two or three months we’ve made some early progress in tidying things up – we originally had three loans and six credit cards (all about to come off 0 % deals) so we’ve consolidated the cards into one loan at 8% APR. The fixed payment structure of a loan and reduced temptation to use cards outweighed 0% balance transfers. In total we’re paying out just over £1500 pm, spread across 4 loans.

So the goal (and it’s ambitious!) - pay an additional £500 in overpayments (£2K total p/m) with the aim to get everything clear in around 2 years – this should leave us with around £800 fun-money a month after all the bills and food are paid.

Once the loans are gone, we plan to snowball the £2K into overpayments on the mortgage (we have unlimited overpayments). Our opening balance for the mortgage is £144K (2.39% interest) so if things go to plan, we should be able to clear our entire debt, including mortgage in just under 7 years.

I know things are going to be tough, especially as the debt starts to topple – the temptation to eventually relax the payments will be hard, but the thought of being mortgage and debt-free (by 42) is overwhelming!

Hopefully I’ll be able to report back on some milestones here :beer:

Silence101

Good luck! You seem to have a good long term plan, and once the debts are sorted, you'll hopefully have gotten so used to your more limited budget, the overpayments won't feel like a sacrifice. And to be debt and mortgage free by 42 is an amazing thought! (We've just signed a 35 year mortgage so if we don't overpay we'll still be paying the mortgage by the time we're 70!)