Putting it all in to practice?!

fruitloop04

Firstly, I know my situation isn't too bad. I have ran up this debt from mindless spending and general money mismanagement but I am in a good position that both CC's are on 0% until April 2019. At the worst, my debt was circa £6k (£4k of house renovations) and now I am down to £1,500 on CC1 and £1,400 on CC2. CC1 is under control...pay £175 a month out of the joint account and don't touch it, CC2 is my reward CC. I would like to get to the stage where I can use this responsibly for the rewards. My LBM was about 8 weeks a go and I threw myself in debt busting and had a really good 4 weeks where I barely spent anything and paid a good chunk off the debt. The past few weeks I have lost my way and really struggled to do a weekly shop, plan meals and have oversight of my spending. I am generally one of those people that start things full on and then tailor off. Maybe I need to stop trying to pay off the debt as fast as possible and leaving little left but take the slower road, pay less of my debt monthly (CC2) but focus on making small changes in habits that just become what I do! Sorry for the rambling post, I guess I am just looking for advice on how other people have tackled their debt and how they sustained this. Thanks!

[Deleted User]

fruitloop04 wrote: »

Maybe I need to stop trying to pay off the debt as fast as possible and leaving little left but take the slower road

If you feel the need to ease off a little, and live a bit more, then there is room to do so.

To clear CC1, before the 0% ends (assuming you don't spend anything more on it), you only need pay about £85 per month.

As for CC2 being a "reward" card, that is going to require self-discipline.

What you need to do, is only spend money on the card, which you have available to repay.

If that's going to be difficult to do, you might want to rethink CC2.

I'd certainly suggest not carrying the card around with you, so you aren't tempted to impulse buy on it.

middleclassbutpoor

Good post. I too am someone who has a habit of starting something with gusto and it not being sustainable. My LBM came before I was in dire straights with money but I do have a substantial amount of debt still to pay .

So far we have paid off £6k off our debts in 4 months which still has £39k to repay. All in all with mortgage my debt to income ratio is around 2 times our income so have just accepted that I should be using this to my benefit before something unexpected happens as we often see others who have unfortunately not had their LBM until it was too late.

Our aim is to apply a strategy of setting short term targets and then focusing in on them. I got this from doing couch to 5k where you have a 12 week period with a goal at the end and then have weekly targets to help you achieve that goal.

So for example, we started this journey at end of June - I set my first goal for July- Aug & Sep. We achieved that goal and now have set another one for Oct-Nov & Dec.

The goals are challenging in that I have set them higher than our pure repayments so this has meant me doing things like:

Checking for PPI
Moving to packed lunches
Reducing times I have a takeaway or eat out
Looking at my expenditure in general
Properly budgeting

It's all helping and we hope that by next April we will have repaid off £25k of debt in total which would be brilliant in 9-10 months. This will not be easy and will rely on our discretionary annual bonuses being paid as well as our continued adherence to the above principles.

We decided on 12 weeks as being about the right time for goal setting to keep us focused on it.

We do have longer term goals set such as a really nice holiday and possibly looking at getting a better house but we are just keeping the focus on these 12 week blocks.

A phrase I have heard goes something like "People overestimate what can be achieved in 1 year but underestimate what can be achieved in 10 years" Our goal setting removes that disappointment of finding that after 12 months we are no closer to where we wanted to be when we have tried this in the past. Just find something that works for you

louby40

Why not start a diary over on the Diary Board. It's good to keep check of spending and debt busting plus it keeps you accountable.

My LBM came in June 2016 and I've been chipping away at my debt (and adding to it with a much needed new kitchen)

There's lots of support over there too!

determined_new_ms

middleclassbutpoor wrote: »

We decided on 12 weeks as being about the right time for goal setting to keep us focused on it.

We do have longer term goals set such as a really nice holiday and possibly looking at getting a better house but we are just keeping the focus on these 12 week blocks.

I like this idea a lot!

fruitloop04

Bedsit_Bob wrote: »

If you feel the need to ease off a little, and live a bit more, then there is room to do so.

To clear CC1, before the 0% ends (assuming you don't spend anything more on it), you only need pay about £85 per month.

As for CC2 being a "reward" card, that is going to require self-discipline.

What you need to do, is only spend money on the card, which you have available to repay.

If that's going to be difficult to do, you might want to rethink CC2.

I'd certainly suggest not carrying the card around with you, so you aren't tempted to impulse buy on it.

Thank you for your reply! I wanted to pay off CC1 as soon as possible (Managed to get it from £4k to £1, 500k in 13 months but I think you are right - I need to slow down on this as there are other things we need that we just can't afford because we are paying the debt back at a higher level. Our mattress is absolutely shot but I am determined to save for this rather than get it on credit!

I am going to use the idea of only spending what I have in my current account on CC2. If I pay £200 off as 'repayment' then spend a maximum of £150 on this during the month I would be able pay this off at the end of the month and not add to the debt. Thanks!

middleclassbutpoor wrote: »

Good post. I too am someone who has a habit of starting something with gusto and it not being sustainable. My LBM came before I was in dire straights with money but I do have a substantial amount of debt still to pay .

So far we have paid off £6k off our debts in 4 months which still has £39k to repay. All in all with mortgage my debt to income ratio is around 2 times our income so have just accepted that I should be using this to my benefit before something unexpected happens as we often see others who have unfortunately not had their LBM until it was too late.

Our aim is to apply a strategy of setting short term targets and then focusing in on them. I got this from doing couch to 5k where you have a 12 week period with a goal at the end and then have weekly targets to help you achieve that goal.

So for example, we started this journey at end of June - I set my first goal for July- Aug & Sep. We achieved that goal and now have set another one for Oct-Nov & Dec.

The goals are challenging in that I have set them higher than our pure repayments so this has meant me doing things like:

Checking for PPI
Moving to packed lunches
Reducing times I have a takeaway or eat out
Looking at my expenditure in general
Properly budgeting

It's all helping and we hope that by next April we will have repaid off £25k of debt in total which would be brilliant in 9-10 months. This will not be easy and will rely on our discretionary annual bonuses being paid as well as our continued adherence to the above principles.

We decided on 12 weeks as being about the right time for goal setting to keep us focused on it.

We do have longer term goals set such as a really nice holiday and possibly looking at getting a better house but we are just keeping the focus on these 12 week blocks.

A phrase I have heard goes something like "People overestimate what can be achieved in 1 year but underestimate what can be achieved in 10 years" Our goal setting removes that disappointment of finding that after 12 months we are no closer to where we wanted to be when we have tried this in the past. Just find something that works for you

Thank you for your reply and well done on making such a dent in your debt in a short amount of time! I really like the idea of short terms goals, I will be definitely using this!

louby40 wrote: »

Why not start a diary over on the Diary Board. It's good to keep check of spending and debt busting plus it keeps you accountable.

My LBM came in June 2016 and I've been chipping away at my debt (and adding to it with a much needed new kitchen)

There's lots of support over there too!

Thank you! I started a diary but then tailored off..will try and find it again and restart it! When I was writing in it then I did keep more of eye on the figures!

National_Debtline

Hi fruitloop04


I would recommend completing a statement of affairs (SOA), you'll find one in the sticky at the top of the board. If you post it on here you'll get some useful tips and hints on changes you could make to maximise your spare money.


The goods news is your debts sound like they are affordable, so this is about you finding a place where you are comfortable the debts are being paid off quickly enough but not leaving yourself short for things like a new mattress, or even a treat here or there. Good luck with it all.


Susie
@natdebtline

Happierdays

Hi fruit loop, I think I remember reading some of your diary.. I find writing in mine helps (even tho I've tailed off a bit but that's cos not much to report at the moment! ) ; getting encouragement /ideas from other posters certainly keeps me going sometimes. I think lots of people struggle with keeping up the momentum of debt busting - my enthusiasm seems to come in fits n starts and occasionally a more sustained attack on debts! Good luck

fruitloop04

Thanks Susie for the nudge to do a SOA. I thought I was doing well but the results are not good!! Firstly, on first look this SOA is going to look a bit strange. We have a joint account where I pay £1000 on a month and this covers all household bills, mortgage, food etc and this is where CC1 gets paid out of...even though this is in my name we see it very much as 'our debt' which is why I am not worried about this card as I am very responsible with the joint account! My account is another matter...which is detailed below. The good news is that I am waiting to start a new job which is better paid. I want to first use the extra income to pay off the debt and then start paying off the mortgage - I think I earn a good wage now so want to continue to live off this and put the rest to good use!


Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household......... 0
Number of cars owned.................... 2

Monthly Income Details
Monthly income after tax................ 2255.05
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 2255.05

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 8.28 Sim only contract but just had to buy a new handset which unfortunately has gone on CC2
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 50
Petrol/diesel........................... 160
Road tax................................ 0
Car Insurance........................... 24 I have started to do the piggybanking thing and set up a 'car account' so will have the money in there for next year
Car maintenance (including MOT)......... 31.5 Same as above
Car parking............................. 5
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 20 £16 on contact lenses then dentist
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)......100 This now goes in to my 'gifts account -
this is a bit of a guestimate tbh as I have never kept tabs on this.
Haircuts................................ 22.5
Entertainment........................... 150 We enjoy going for brunch on a weekend and a fancy pants dinner occasionally...I used to pay for the majority of this as I earn more than my OH but I am going to start getting him to cough up!
Holiday................................. 270 We are going to be visiting friends in America in September and would like a cheeky holiday May time if we can afford it. My OH puts £100 a month in here too so total is £370 monthly for holidays.
Emergency fund.......................... 250 I opened a regular saver and the max I can put in is £250 a month so just went with that...
Work Lunches & Coffee................... 40 This needs to stop! I was doing well with taking lunch to work but have been really bad recently!
Joint Account........................... 1000 Explained above!
Drinks for Home......................... 20 I generally need to knock this on the head...I use alcohol to unwind after a bad day and am drinking more than ever (79p beer in Lidl!)
Lottery................................. 20 Need to knock this on the head too..I never win!
Unison.................................. 14 This probably should be more because I haven't told them about any of my job changes...
Gym..................................... 27 I need to use this more to make it worthwhile until I can cancel in Jan 2018.
Total monthly expenses.................. 2222.28


Assets
Cash.................................... 1250
House value (Gross)..................... 175000
Shares and bonds........................ 0
Car(s).................................. 2000
Other assets............................ 0
Total Assets............................ 178250

No Secured nor Hire Purchase Debts

Unsecured Debts
Description....................Debt......Monthly...APR
CC2............................1400......400.......0
Total unsecured debts..........1400......400.......-


Monthly Budget Summary
Total monthly income.................... 2,255.05
Expenses (including HP & secured debts). 2,222.28
Available for debt repayments........... 32.77 :eek: This has truly horrified me... :eek:
Monthly UNsecured debt repayments....... 400
Amount short for making debt repayments. -367.23

Personal Balance Sheet Summary
Total assets (things you own)........... 178,250
Total HP & Secured debt................. -0
Total Unsecured debt.................... -1,400
Net Assets.............................. 176,850

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

fruitloop04

Happierdays wrote: »

Hi fruit loop, I think I remember reading some of your diary.. I find writing in mine helps (even tho I've tailed off a bit but that's cos not much to report at the moment! ) ; getting encouragement /ideas from other posters certainly keeps me going sometimes. I think lots of people struggle with keeping up the momentum of debt busting - my enthusiasm seems to come in fits n starts and occasionally a more sustained attack on debts! Good luck

Thanks Happierdays, I will have to reinvigorate this! It did help me whilst I was doing it Hope you are doing okay!

[Deleted User]

Ant chance your partner could work?

Even part time would give a boost to the household income.