My life in debt 7 February 2018 at 10:30PM in Debt free diaries 46 replies 5.8K views

savingholmes

Hi have you looked at the MSE credit club - to get an up to date report on your credit score. It would show you if you were eligible for any other offers. May be worth going down that route first before declaring to the banks you were struggling to pay.... Our debts are higher than yours and were £10K higher a year ago. Depending on your income and your commitment you can pay it off... Keep going. You have made a major first step in selling your motorbike - I can only imagine what a wrench that was - my OH is into motorbikes too...

I understand the attraction of having fewer debts but personally I would pay off the highest interest one asap.

Mumoffourkids

NeverendingDMP wrote: »

Hello and welcome. Im fairly new to mse world myself but am also someone who learnt debt was okay as a student and then never un learnt it until it was too late. I understand why you want to clear your overdraft first. Our overdrafts were the smallest of our debts but with some careful budgeting and both of us swapping bank accounts for the cash back we paid ours off. I'm not sure on current offers but we got £250 each last year when we swapped. My partner was offered interest free overdraft for 6 months as well. (He wasn't listed on the DMP at the time so could still get lots of credit unfortunately. ) it might be an option if you want to avoid the dmp route if only to give you a temp reduction in overdraft fees. I'm also now in a thread were everyone sets there own challenge for the monthly food shop. Currently in February grocery challenge 2018. Our budget is now extremely tight so I personally have found this a motivator to try and figure out how to feed us all for 390 a month x

Sorry to highjack your thread deux, but never ending when you say you have £390 to feed all of you for the month, how many of you are there? Just wondering as it is me and six kids and I have just over £400 a month to feed us all including nappies for the youngest two and packed lunches for four of them. I budget £100 per week and I regularly have money left over apart from this last week as it was half term and the kids have been home and eating!

To return to your thread deux, welcome to the boards and good luck on your journey. I just read that you have £3000 from selling your motorbike. Have you put your figures into the snowball calculator on stoozing.com. You put all your debts in and the interest rates and minimum payments and it tells you what order to clear them in in order to pay the least interest. It might be worth playing with that in order to see where is best to put your £3000.

NeverendingDMP

Hi mumoffour kids. It's for five of us plus a dog. I'm sure it can be done and nice to know you are managing with money to spare. Downfall is hubby and alcohol !!!55358;!!!56596;. I've changed the way we do our finances though now which is teaching him some tough lessons.
in money...haha

Deux x m. The snowball apps sound a good idea.we went to a DMP with stepchange as we had a life change and couldn't afford the minimums. It's very good for us but does frustrate me that we still owe money to everyone and we can't pick them off one by one. If you try different things in a snowball calculator you will have clear options of what order you need to pay to make it the cheapest and quickest way.

Mumoffourkids

Neverending, I am only managing because I went for about 8 weeks with no tax credits so I had to survive on my weekly child benefit and maintenance which comes to £170 per week. That had to cover food, petrol and any other kids expenses. I got used to only having a max of £100 per week to spend on food, my wages covered my rent just about and my other maintenance covered my monthly bills. I think when you are faced with a strict budget, when you eventually have more money, it is hard to spend more, or at least I find it is. I rarely drink so that helps and my food bill was about £50 per week when I was with my ex! I definitely have more money now I am on my own but it is hard when you have no one to talk to about money and important decisions!

deux_x_m

Hi Mumoffourkids. Our food budget is £400 a month. That's for two adults plus 8 and 10 year old boys who are permanently hungry. That also includes all the household cleaning stuff and toiletries. Alsi is our friend!
I have played around with a couple of different snowball calculators. There is no doubt that paying the highest interest rate first is the best thing to do from an overall view. However I think that the boost from paying my loan off will give me the impetus to keep going. I worry that I'll feel the frustration of NeverendingDMP in that I'll owe money to everyone instead of picking them off one by one. Either way the Fluid c/c (highest interest) will be paid off in October next year - sounds ages when I say it but looks so close on my spreadsheet...

Mumoffourkids

Hi Deux, I think you might be able to reduce your grocery spending slightly. Trust me I have a 15 year old who plays rugby and eats loads, a 9 year old boy who seems to have hollow legs and two small ones still in nappies. My budget also includes all toiletries, cleaning stuff and packed lunches for the four of them. I used to shop at Aldi but I found I spent more than I do online with Asda. For example this week my main shop is £50. That includes everything for the week until next Sunday. We are having takeaway one night as it's one of the kids birthdays. During the week I will spend about £15 - £20 on bread, milk and fruit from the local shops. So I reckon my total spend this week should be about £75.

I know what you mean about wanting to clear debts so you have less to pay. I was lucky in that I had a few small ones of less than £1000 which I was able to clear quite quickly. After next month, I should be down to just two debts from a total of 9 at the start. I was also lucky in that one of my largest debts decided not to chase any more for the money and one seems to have disappeared.

deux_x_m

Pay day!

Payments to both Barclaycards made - rounded up to the nearest £5 as it made me feel better!
The other 2 credit cards are on direct debit at the end of the month for the minimum payments. They'll stay like that until my loan has gone, then I'll pay what was the loan money into the higher interest card.
Loan payment goes out tomorrow, then 4 more payments until I can pay it off.

And only 28 days until I get paid again!

deux_x_m

Pay day again, and for the year's shortest month it dragged!

It wasn't the greatest month for saving money and being frugal. The wife's birthday coincided with mother's day, an extra £25 in petrol was needed to visit my mum for mother's day, insurance and road tax for my new bike needed paying and both of my boys came home with letters for a school trip and cub camp. Frustrating - but part of life and nothing I begrudge.

On the plus side I've made all my payments today, and the total debt is now (just) under £45000. Not quite as much of a reduction as I had hoped initially but better than when I started. 3 more paydays and I should be able to pay off my loan - this is my first goal and what I keep focusing on to keep me on track.

More good news on our joint account (which I haven't really mentioned here). The rise in this year's council tax was offset by an almost identical reduction in the water bill, renewing the electric and gas bill saved another £4 per month and we have under spent on food by just over £100 this month. Add in the last 2 months gap in council tax payments and that overdraft is getting paid off nicely.

deux_x_m

Another payday down - 43 to go!

Things are going pretty much on track, although I've really got to be stricter on making my lunches - buying lunch near work is just needlessly spending money that would be better put paying off some of my overdraft.

Looking over my spreadsheet and YNAB since I started this diary the thing that truly puts things into perspective is not the total amount I owe, its the interest I'm paying on my debts. Since February I have paid £1446.67 in interest!!!

£1446.67? That's over 3% of my debt - in only 3 months. That hurts. I knew I was getting charged and paying the interest, but it was never something I really thought about. As long as I was within my limits and paying the bill each month I was managing. In hindsight this is a ridiculous way to be, but it was how I was for years.

I can't do much about the interest rates at the moment but hopefully as the debts come down I may be in a position to balance transfer to a lower rate. If not its still on 43 paydays - and I can do that.

deux_x_m

Still going and still motivated. It's slow going though! When I look at my spreadsheet it all looks so within reach and the total tumbles down. Then I realise that what I can see on screen at any time covers 2 years!

I remind myself that I have been going for 5 paydays so far and that I'm still at the start.

On my original plan I had intended to pay off my loan at the end of this month. Unfortunately it looks like I'll be about £50 short. I'll see what is possible but it may wait until August.
I've copied my spreadsheet and looked what would happen if I didn't pay the loan early and just left the money in my current account (keeping overdraft significantly reduced).
There are more than a couple of positive points to this - I am comfortable with what I am doing and don't have the desperation to pay off my first debt that I had when I started, the o/d rate is 19.9% vs the loan rate of 9.9%, it'll be paid off in February anyway and it will stop me from going to almost the limit of my overdraft which I have to remind myself is as much of a debt as all others.
However I had a plan and the motivation of not only paying it off but being able to get started on paying off the highest interest credit card is strong. I am leaning towards sticking to the plan,

I guess the main thing is I keep paying off as much as I can and refrain from spending any more than I need to.