Tidying up the mess

BabyStepper

Still full of cold...bleh. Lucky it's a quiet one for me.

I'm working on next month's budget. We need so many things, too much month, not enough wage, just the usual. Pretty sure we won't make much of an overpayment to the debt but I'm determined it will be something.

redmel...if updating your diary helps you to stay on track then go for it. Anything that works has to be good, right?

This gorgeous, sunny, autumn weather is so uplifting. WIsh I could be out in it today.

Lydia42

Keep posting, keep focused!!!! You're doing great.

BabyStepper

The wallpaper arrived yesterday, ordered online and £30 cheaper than our local store. Score. If only I felt well and had any energy at all. Turned out our friend does have extendable ladders so hopefully they're arriving at the weekend then we can get going. Exciting and cheap.

I made another thread on here about our mortgage and got pretty much no help, just more panicked than before. How I wish we had never gone with the TSB. With all their problems lately I have no idea what's going to happen when our fixed rate is up. Wishing I could turn back time.

OH is pleased as one of his credit cards has increased his limit massively. It's the one with the 0% on purchases til 2020 deal so we are getting busy trying to move as much interest bearing debt as we can to this one. And there was me thinking we would never use cards again. OH is convinced this will increase his credit score as both his cards were maxed out, I'm not so sure but remaining hopeful. Surely having too much available credit is also bad?

Maybe that's a good point for other Dave Ramsey fans. It's not actually possible to just stop using the cards and pay everything off. Moving to interest free deals is a huge help in the battle against debt and to do that, you need to keep playing the credit card shuffle game. How I hate it.

Anyway. as you can tell I've woken up feeling quite miserable about the debt. I need to remember it is going in the right direction, downwards, and we are in a much better position than we were 5 months ago when we started all of this. Positive attitude. Hope everyone is feeling cheerier than me.

missymoo81

Hey babystepper. I think you’ve done amazingly well! Don’t lose heart! Think of how much you would have put onto your debt if you hadn’t had your light bulb moment and started this!

You’ve inspired me to sort my life out! Thank you. Now where’s my diary.....

[Deleted User]

I second missymoo.....you really are doing incredibly well...you're making in-roads on the debt, you are avoiding adding to it and every day you are considering ways of spending less! :T

You need to remember that you didn't get into your financial position overnight and you can't get out of it overnight either....it takes time and perseverance.....

I have been on my journey for years, I've fallen off the wagon more times than I care to remember and I've had so many 'what's the point' moments it's not even funny! But I'm still going and my attitude to debt has really changed as a result - I still have a cc but 99% of the time, it's paid off in full - when it isn't (which is currently the case:() - I feel jumpy until it is which is incredible considering at one point my cc debt was over 50k and didn't make me bat an eyelid :eek:

Concentrate on the progress you have already made and continue making - 5 months ago, your situation wasn't as good as it is now and every day makes a difference!:D

Lydia42

Hi. Keep going, you are doing great. Like the others above have said, you are in such a better position than you were a few months ago. It's so hard to keep positive in the long term as it feels like time is standing still, but you are heading in the right direction. Perhaps hop onto the 'what debt free things have you done today' thread to keep motivated? It highlights the little things we are doing each day once we have had our light-bulb moment and have done the big things to sort our money out.

BabyStepper

Thank you everyone for your encouragement and support. I really needed to hear all of those things yesterday, much appreciated. :A

I've been working hard on the finances the last couple of days. Prepare to be bored, but this is what I've been up to.

The targets/goals I've been coming up with all seemed fairly pointless. There's no way the Hitachi loan needs paying first (despite being the smallest loan) and there's also no way we're going to suddenly find over £700 to overpay every month (yet). I had a proper think about our financial commitments in the next year and realised that when the mortgage is due for renewal next year we are not in a strong position given my self-employment and the level of debt. Cue complete crisis and a thought that we might lose our home. :eek: Trying to get in shape for this has become the focus.

Me and OH checked our credit scores and they are both terrible. OH's because his cards were almost maxed out and mine because there were a variety of mistakes on my report ranging from not having me recorded on the electoral role to one of my previous addresses being too long to fit in the box therefore my report could not update! Seriously! I spent a tearful half hour on the phone to some poor woman at experian who fixed all the mistakes and my report immediately updated to 'fair'. The last 1 remaining problem is how I use my cards, apparently. And there was me thinking the problem was because I'm self-employed. That was not the case. OH is waiting to see if his credit limit increase helps his score.

I started looking at how we were going to remortgage if the TSB didn't come through with a customer retention product. We really want to get away from this bank, they look like they're going to collapse, and they might not be able to help us anyway. As if by a miracle, OH came home from work yesterday with the news that the promotion request, that has been dangled like a carrot for over a year while he 'acts up' in his role, has finally been submitted. We won't know for sure for another month or so, but it looks likely to happen and his new wage will more than cover a new mortgage application. Thank goodness for that. We're trying not to count our chickens, but if OH goes for the mortgage on his own then we need to get his debt looking better. And mine, as we are linked financially, needs to be at least ok.

I have taken all the minimum payments on the cards and rounded them up to the nearest fiver so we are overpaying everything every month, even just by a little. We are going to buy as much as we can online with the cards and pay the cash off the interest bearing cards straight away. This will show we can use the credit but not go mad with it. The overall aim is to move as much as we can to interest free, and to reduce OH's debt to around 50% usage of available credit by March next year, so reduced roughly by £2,700. I also need to move the emergency fund into an account in his name rather than mine.

I've pretty much accepted there will be loads of credit card shuffling for the foreseeable future. It just can't be avoided. But all of this has made me see the many ways in which the Dave Ramsey strategy just does not work for everyone. Minimum payments and not using the cards at all WILL mess with your credit score. You need a good credit score to get your mortgage sorted. You also need it to keep getting 0% deals.

Saving an emergency fund was a great idea, and seeing the debt for what it really is was also helpful. But until those cards are gone you need to keep playing the game. It's not possible to just opt out.

All of that has been exhausting and I really feel like we're flying by the seat of our pants at the moment. But I'd rather have found this out now than when we were due to renew our mortgage which is stressful in itself. Hopefully when the time comes that will all go smoothly.

By concidence, the £2,700 we need to reduce OH's debt by is also around the same as the interest bearing part of the Barclaycard. So that's what the aim is, get rid of that. And keep our fingers crossed for his promotion.

Lydia42

Fingers crossed for the promotion. That's great news. It certainly seems like you have a definite plan now and are much more positive over it all.

Dave Ramsey is good, but as you say one size does not fit all. Ultimately i am concentrating on paying my cards in order of when the 0% deals run out, not as he suggests. Barclays runs out on 1st Nov so i've just paid the final payment on that one. Gonna be a tight month as had to find £295 to clear it but it's a good feeling to know that one is dealt with. Three more to go plus an overdraft. Does having all your cards fairly maxed impact really badly on your score? Am i better keeping my Barclaycard account open but not using so they can see i have available credit i am not using? Or should i close it do you think? We are hoping to look at our mortgage pretty soon as our current deal ends on 31st Jan 2019.

BabyStepper

Hi Lydia

I have also rearranged the order of paying off the cards based on when the 0% deals run out. It makes more sense. Smallest to largest is just not going to work.

Well done on getting the Barclaycard sorted out...great! I'll need to pop over to your diary and see how it's all going. That is good news though and fantastic progress! Well done!

About our credit reports, basically they show you what things are helpful and improve your score, and what things are not helpful and reduce it. Having long term relationships with the card providers is good, apparently. So all the card applications for 0% and balance transfers I did just before my LBM has not helped but even a few months extra can help, so it all improves in time. Having cards maxed out was a big red flag. Who knows what they're looking for overall, but one of the things is to try and show that you are not desperate for credit, that you have some available and don't need to use it. About closing down your card, I guess it would depend on how much credit you have available, and how much you are using. According to mse, if you use roughly 50% of your available credit then that's a good balance. Maybe if you keep the barclaycard open, they will make you a 0% offer, which you may or may not need to use but if you did, the longer term relationship with Barclaycard would help rather than going to a new lender. If you follow what I mean? It's a full time job trying to figure all this out!

What I would like to know is how much available credit is ok in relation to your wage. Still trying to find that one out. I'm also not sure if having 0 balance on one card and say 5k on another is alright, could be that you'd do better to split the balance between cards. I really don't know, it is a mystery, but to all the folk on here who say your credit score is meaningless and doesn't matter, I'd have to disagree. Without a good credit score you will struggle to get your remortgage.

I'm feeling more positive today and your good news about your Barclaycard has spurred me on some more. :beer:

GlendaSugarbean

When I was looking at a mortgage, the advice was that your total debt payments (inc mortgage) should not be over a certain percentage of your income
- I think the maximum advised was 40 or 45 percent?

It's all about affordability and ensuring you can recover if interest rates go up. A mortgage advisor should be able to help here.