Tidying up the mess

pidge04

Just wanted to say I think you are doing really well.

enthusiasticsaver

Bear in mind that lenders have their own credit scoring system and when you come to remortgage they don't see the score the agencies give you. They look at affordability and credit record (defaults, late payments, maxed out cards etc). The generally accepted way of improving your credit record is to use one card effectively which normally means clearing it in full monthly and then not using a certain percentage of available credit and monthly payments (not minimums I think they use 5% of total debt) not being more than a certain percentage of your monthly income. If you don't go with TSB a broker might be able to help you. If you are trying to reduce debt by not touching cards at all that may impact negatively as it shows no recent history of well managed credit.

I agree that the DR method doesn't work for everyone. I would always advise most expensive debt first rather than smallest. If money is tight I would recommend a smaller EF and don't shuffle cards to get 0% deals just before you are due to remortgage. The applications impact on your credit record. I don't think the score is meaningless but lenders don't score the way the agencies do and they don't all score the same. Bad things on records are defaults and late payments. Having a lot of maxed out cards with minimums only being paid will also I,pact negatively and using a large percentage of available credit. Any new applications will bring the score down too but you are right in that it recovers in time.

System

Hi :wave:

Firstly, congratulations on starting your debt free journey. We started in January but got serious in September.

I just wants to give you some support.

We are also ignoring our student loans. At the moment neither of us are eligible to pay them back. DH has a really small loan so we will be overpaying it when the time comes just to get it out of the way. Mine on the other hand, well, I don't even know how much I owe. £30k? Not worried at all about it.

We are also relying on 0% cards. We were paying £160 minimum payments on 2 high interest cards. We now pay £150 on one 0% card. Bit of a no brainer really.

Also, we're not really following DR but have paid off our smaller debts first and it has really helped. We're so much more focused now we've made some progress.

Good luck with the rest of your journey. Will be following for inspiration :beer:

DD265

I also have debt on 0% credit cards. Balances as of today are -5900/8100 on MBNA, and -2800/5000 on Barclaycard. I pay at least £100 off each card a month; right now it's just that as we're saving a deposit as quickly as we can.

I've managed to get myself into a position where I can balance transfer between those two cards so I've had them both a few years now. Admittedly I had to do several transfers back and forth last time to get it all back on 0% (the Barclaycard limit only went up recently). Those fees were still cheaper than the interest would've been!

Also, this might or might not be useful down the road; I used a money transfer from the MBNA card to settle my loan. Again the fee to do that was cheaper than the interest I would pay.

pidge04

It feels sooooo good to see the figures going down, doesn’t it? Well done for the reduction you have achieved so far!! You are on it!! Keep pushing on!!

BabyStepper

Thank you so much everyone for all of your responses. It is such a help to know others are cheering me on, I really appreciate it. :A It's also so useful to hear what you all do to keep those plates spinning, keep the interest rates down and keep persevering! We're all going to deserve a medal at the end of all this. How I wish it was over NOW!

I've been up since the crack of dawn looking at the finances. My invoices have been paid and all is well in that department. However, one of my expenses has come in £300 more than I am prepared for and we also overspent last week and are £70 short of another bill I need to pay. I'm looking at the accounts trying to magic that money out of nowhere but it looks like we will be dipping into the emergency fund in a big way. How depressing.

I have noticed a pattern in our spending, that when we get near the end of the month we start spending as though we have already been paid. This creates a shortfall in the budget every month. I'm going to talk to OH and see what we can do to fix that.

OH headed into town yesterday with some cash and a strict budget to get some new clothes. He's been wandering around in raggedy things for a few months and complaining very loudly about it. I have to say he did very well and came back with hoodies, jeans, a smart jumper for work, a new pair of shoes and a hat, all well within budget. And looking very pleased with himself. I love how together we are on this. The entire amount could easily have been spent on any one of those items.

I have moved the boiler service to next month because we just can't afford it this month. Important that it gets done at some point though.

I suspect this will be one of the tightest budgets I have ever tried this month. Such is life as an MSE-er. Should've been more careful in the first place.

redmel1621

BabyStepper wrote: »

Thank you so much everyone for all of your responses. It is such a help to know others are cheering me on, I really appreciate it. :A It's also so useful to hear what you all do to keep those plates spinning, keep the interest rates down and keep persevering! We're all going to deserve a medal at the end of all this. How I wish it was over NOW!

I've been up since the crack of dawn looking at the finances. My invoices have been paid and all is well in that department. However, one of my expenses has come in £300 more than I am prepared for and we also overspent last week and are £70 short of another bill I need to pay. I'm looking at the accounts trying to magic that money out of nowhere but it looks like we will be dipping into the emergency fund in a big way. How depressing.

I have noticed a pattern in our spending, that when we get near the end of the month we start spending as though we have already been paid. This creates a shortfall in the budget every month. I'm going to talk to OH and see what we can do to fix that.

OH headed into town yesterday with some cash and a strict budget to get some new clothes. He's been wandering around in raggedy things for a few months and complaining very loudly about it. I have to say he did very well and came back with hoodies, jeans, a smart jumper for work, a new pair of shoes and a hat, all well within budget. And looking very pleased with himself. I love how together we are on this. The entire amount could easily have been spent on any one of those items.

I have moved the boiler service to next month because we just can't afford it this month. Important that it gets done at some point though.

I suspect this will be one of the tightest budgets I have ever tried this month. Such is life as an MSE-er. Should've been more careful in the first place.

I love that your OH is so on board with debt-busting. I really wish my husband would get on board a bit more. He says all the right things, but when it comes down to it, he just throws caution to the wind and does what he likes.

I know there are MH issues and these do play a part in his spending habits, but I find it so frustrating. Well done to you both :beer:

DD265

BabyStepper wrote: »

I have noticed a pattern in our spending, that when we get near the end of the month we start spending as though we have already been paid. This creates a shortfall in the budget every month. I'm going to talk to OH and see what we can do to fix that.

You aren't alone; it's so easy to 'borrow from tomorrow'. Come towards the end of October, when you're starting to think about getting paid again, read this post and remind yourself how it feels to realise that October's pay has already been partially spent. If you have room in your budget, you could also set a weekly 'spends' amount so you have some fun money distributed throughout the month.

You're doing well though. Dipping in to an emergency fund sucks, but hey you have an emergency fund to dig into. That's a big deal! :T

BabyStepper

redmel, it's not always easy with my OH. He whinges like mad about it sometimes and does my head in. Between us we have a fairly decent income but he goes on to our friends and family about how little money we have, and forgets to say it's because we are changing the way we do things, not because we have no income. It's quite mortifying sometimes, especially as we are probably in a similar situation to most families in the uk. When I read about all those poor people using foodbanks, and we have a lovely big house, enough money to pay all the bills and eat, I think we should really be counting our blessings. I have asked him to try and stop, and to his credit he has done, but it still spills out sometimes.

DD265, yes we need 'spends', you're totally right, most months we have no budget for fun. And a bit of leeway around the final week of the month would help.

We've had another great day, staying on budget, all good.

BabyStepper

Not much to report today, just thought I'd check in since it's been a while.

I've fully recovered from my cold which is great. Makes me so glad to feel well!

The Barclaycard has now started earning quite a lot of interest. I'm waiting for the statement to see how bad it is. We're still shuffling to the MBNA card which is 0% on spends but given our budget and how limited our spending is, this might take a while. I'm pondering a 0% balance transfer now that my credit report is sorted out, but I'd rather not so we'll see.

Our hall looks atrocious, the papering did not work to cover the lumpy bumpy old walls. We're getting a plaster in who has given us a very good deal given all the prep has already been done. This can't be helped, at least the debt is not going up even if it continues to go down very slowly. I think Dave would approve of cash flowing all this, even if it means taking longer to pay things off.

Otherwise, a quiet month for us. We've made some arrangements to see friends who live far away next month, an expense but totally worth it.