Time to clear some debt!

sapanda

So I meant to start with a proper debt plan a year ago, but then it didn't happen and here I am 12 months on with basically the same levels of debt and no closer to being debt free!

My relationship with debt has been a complex one, and I'm not in debt directly from overspending - I haven't gone and spent it all on clothes, watches, holidays, etc.. However I did use it to fund losses at my attempts to trade when I didn't really know what I was doing and it brought out behaviour that would definitely class myself as a gambler rather than trading (Oddly I'm not fussed about sports gambling or casinos, but there was something in trading that spoke to the risking taking aspect of my personality and I lost all sense of perspective). It's taken nearly 3 years to wake up to the fact that I was just making things worse, and I was very unlikely to "trade" my way out of this (and besides I was always looking for that big "win" rather than grinding out with small trades and protecting losses).

My biggest struggle has been trying to not get sucked into thinking "What if I had done this..." or "What if I had started 12 months ago, look how much I'd have paid off..."

Thankfully I earn a good salary and I'm in a secure job, so provided I can stick to a semi-decent plan I should be debt free within a few years.

I have built myself a budget spreadsheet, making a few tweaks but I may share it on here as I think it's quite good (if I do say so myself) and I plan on starting to make over-payments from the end of March against the debt along with transferring some to a 0% balance transfer card (only 6 months but gives me some room).

I'm hoping that starting this, and keeping it up to date will help with focusing on the picture of where I'll be in the future rather than getting distracted with what could of been.

Some positive before I get onto the numbers, I have had all my PPI refunded which I have used to pay off a loan and an old overdraft so that's a nice start to the year

Anyway, onto the numbers for unsecured debt:

Credit Card #1 - £13,279.00
Credit Card #2 - £4,019.99
Credit Card #3 - £3,474.12
Credit Card #4 - £6,680.05
Credit Card #5 - £500.00 (Hopefully cleared within 6 weeks - 0% for another 12 weeks)
Car Finance - £10,230.00
Store Card - £650 (0% until December)
Personal Loan #1 - £4,800.00
Personal Loan #2 - £5,500.00

Total = £48,483.16 (As of 20/02/2018)

Current plan is to start with £500 per month additional payments at the end of March and increase them to £800 per month in September when I'm expecting to be able to afford a bit more towards debt repayments.

Snowballing estimates around June 2020 to be totally debt free, but I'm hoping to get there faster once I've got into a rhythm of paying off debt, have improved the credit rating and hopefully can move some more of it onto 0% as more options open up.

Lacherlich

Hey

Just had a read through your diary Wow so pretty impressive you can clear it all by 2020! That should be pretty motivating in its self. My debt peaked around £30k; but knowing that if I am really strict I can pay it off in just over a year defo keeps me motivated. Well... nearing 2 years in total!

I have never not had debt; so i cant imagine how it is going to feel when my debt is gone. I have also been there, thinking if only I had started a year ago etc etc Id be debt free now! But I know things have happened in the lead up to now that I dont regret; but have learned from. We're in a lucky position we can move on from where we are reasonably quickly. A year or two of sacrifice but then financial freedom! I started a diary a few years ago and was shocked my debt was (only) around £17k at the time; how things escalated in a few years!

Snowballing is defo the way to go; ive managed to clear one credit card so far; so have 2 more to go now (after making the last payment on some shutters i am having installed).. then the loans and HPs.....

I guess another motivating factor is thinking how fast a year can pass. It might seem a bit daunting at first but if you're committed and focused it wont seem that long and will be worth it. I keep a pretty nifty budget spreadsheet too which I love as i can see my debt level projections drop each month

Anyhoo ive babbled a bit; good luck with it! Ive subscribed to see how you get on.

sapanda

Thanks

I'm hoping for 2020, but all going to depend on whether I can keep up fairly aggressive over-payments and possibly earn some extra on the side to chuck at debt too.

In the same position that I've always had debt, I remember getting my first credit card with a £500 limit at 18 and it's basically been debt since then but I am looking forward to the day when I have none and I'm no longer wasting money on interest (I keep thinking I should add up how much I've wasted in interest payments over the last 10 years... But I think it might depress me too much )

Totally agree that a year will pass fast, I think that was my problem a year ago when I first looked at snowballing it all away - Just felt so far in the future that I never started, but all of a sudden it was Christmas and it's now nearly March again so the time does fly.

I've put a snowball calculator into my spreadsheet but haven't yet done projections on how the debt will reduce with some nice graphs to keep me motivated -- Maybe that'll be a job for this weekend!

Have subscribed to your diary as well!

beanielou

Happy shiny new diary

Lacherlich

God I dont even want to think about how much I would have spent on interest in the past 10 years since leaving uni! To be fair i havent always been earning as much as I do now; so debt was kind of a symptom of living beyond my means! Now I have a chance to stop that habit!! Selling my car was a big help; lucky as I work and live in the city so no need for a car at the moment.

Oo i haven't got round to putting any graphs together; might be a good visual aid though.
Im looking at consolidating my debt at the moment; I have debt spread across 10 different sources; so its a bit hard to keep on top of. As i aim to pay it off within 14 months I dont end up paying more interest than I would with my current debt; so makes sense really!