I want to clear every last penny

Duh18

Hi

I am new to the board after discovering MSE online when searching for help. I had a pretty bad break up 2+ years along side a job I was extremely unhappy in which looking back was a combination for a disaster. 2 years on and I’m in a new job and feel a lot better about myself however still following me around is the large amount of debt that I have amounted over the last 4 years more so in that 2 year period. I am currently 24 and want to have this debt cleared in the next 2 years to stand myself in good stead from 26 onwards in regards to mortgages savings etc. I’d appreciate any help as and where.

I know people advise SOA but here goes as I live at home with parents so many of the columns aren’t relevant.

NET salary £950.00 (£1250.00)
I have a £300.00 salary sacrifice car which finishes in March 2020.

Contact Lenses £20.00
EE Phone £45.00
Gym (12 month contact till August 2019) £30.00
House keep to parents £60.00
Petrol £50.00

£745 remaining

HSBC credit card , £6,300 (0% till December 2019 then 21.9% onwards) £160 min
Santander credit card £3,000 18.9% £80 min
Barclaycard credit card £500 (0% till December 2019 then 34.9%) £10 min
Lloyds refinance loan £2700 9.9% £45 min (79 months remaining)
Halifax overdraft £315 (£45 a month repayment plan till April 19)
Argos Card £300 29.9% £20.00 min

£385.00 left, where do I start?

£13,100 to clear :(

Even writing this post feel like a slight weight has lifted off my shoulders

brummieaxgt

Firstly i would probably let your parents know of our intentions to pay your debts.
Ask for house keep to be delayed for a few months while you concentrate on this.

Looking at this- my personal opinion- Tackle the lowest amounts first within reason.
Pay ARGOS card off within the first month. Its gonna be a tough month but if you can ask not to pay house keep you will feel so much better the following month. Releases £20 per month.
Second month- Me personally would then be overdraft. Pay off in full. Nothing better than seeing your bank stay above 0 every month.

By month 3 you would have released £65 towards other bills.

Then really its tackling the cards. Do you have any further balance left on the 0% cards for balance transfer? The santander card at 18.9 is one you really want to look at moving or paying down asap.

Its a hard approach but within 3 months some debts should be a memory and can move forward.

badmemory

Do you actually have the £385 per month available for debt repayment?


Next payday kill the Argos card & don't forget there may be residual interest for the month after. No interest/charges on the Halifax a/c? Do you now bank with another bank? If so ignore it & move on the the Santander card, if you still use that a/c & there are ongoing charges then pay this off first.


Personally I would look at my phone costs but if you do use the gym then keep that as it is good for both physical & mental health. I am assuming the payment to your parents is what they need to receive as the amount is so small it isn't anywhere near enough to keep you & if they could afford to then they wouldn't charge you at all. Unless of course their point is that no-one gets a free ride. Personally I would say thank you, thank you, thank you & help with all the chores.


So that is Argos & Santander gone within the year then kill Barclaycard before Xmas next year. That leaves you with over £500 a month to throw at HSBC which should be down to under £4k anyway by then.


Anything you can move to 0% from HSBC on the run up to next December will obviously make things easier but if you have had any arrangements to pay they could be harder to get.

Suseka97

Firstly well done for looking to tackle your debt problem.

I'm no expert, but the general advice is to hit the high interest debts first and there is such as thing called a 'snowball calculator' that helps people work through debts in that manner. I don't have a link and maybe someone else will be along to provide one - or you can google it of course.

If you can speak to your parents about the situation and manage to agree a bit of a break from the housekeeping, that's great - it would help you get on top of some of the smaller debts.

Personally I can't see you being able to clear that balance in 2 years - not with interest being piled on, but see what the snowball calculator indicates first. The good thing is you have time on your hand and with a level head and a plan you do have a brighter debt free future ahead of you.

Also, if you haven't done so already, cut up those cards

fatrab

Snowball calc - http://www.whatsthecost.com/snowball.aspx

I would advise you pay the highest interest debts first. This is the cheapest long term option, however be mindful of any 0% rates coming to an end. You don't want to end up with £4k on a card dropping onto a 19.9% rate and not be eligible for a balance transfer card!

What's your credit history like? Have you ever missed any payments or had problems obtaining credit recently?

If I were you I'd pay the £300 Argos in full this month and close the account. Put the extra £85 to the Santander card. Next month pay £405 to Santander and keep doing this until it's clear. By then your Halifax overdraft repayment will also be clear. You could then clear the Barclaycard in the hope that they give you another 0% offer later in the year to transfer the HSBC balance on to?

It's going to be a tough 6 months to get to that stage but if you are determined to do it and prepared to make some sacrifices (like having a very quiet Xmas and explaining to people why you're not buying presents this year) then you will do it!

Best of luck

Duh18

Hi sorry I made a mistake in regards to the Barclaycard the 0% APR runs out in December 2018

Thanks everyone for the advice, I’m going to do as follows:

Barclaycard paid by Christmas 2018
Argos paid by Christmas 2018
Concentrate on Santander to be cleared Christmas 2019

HSBC should be around £4000 December 2019 which I can then concentrate on clearing for 12 months

fatrab

Pay Argos first though, don't pay an account which still has 0% interest until you need to.


October - Pay Argos £300 and £85 extra to Santander
November - Pay £340 to Santander and keep £65 back for next month
December - Pay £470 remaining to Barclay
January onwards - Pay £415 to Santander until it's clear


Best wishes

sammyjammy

I don't think you should ask your parents if you can forego your housekeeping, its £60 a month, chances are they are already part funding you.

Duh18

I agree with the house keeping. I have made a 15 month plan till December 2019, by then I will have around £4000 to clear which I will hit at around 500 a month.

I don’t know if anybody has experienced similar but I feel like I’m working full time and the next 15 months of my life I am wishing away, has anybody experienced this and if so how did they battle it?

redux

Does the Halifax overdraft have fees or interest?

If they haven't waived these, I'd hit this first. The daily interest arrangement is better for modest balances than the old flat fee, but it does still add up to quite a rate of interest.

fatrab

Duh18 wrote: »

I don’t know if anybody has experienced similar but I feel like I’m working full time and the next 15 months of my life I am wishing away, has anybody experienced this and if so how did they battle it?

I call it "coasting".

The period of time from one payday to the next, waiting for that all important wage to arrive then you can pay everything for the month. I used to go the pub, out for meals or away for weekends. But when I realised the mess I was in and that I had to sort it out, I started going for walks, finding free days out or events that were on at local places. You just need to find other ways to occupy your time that don't involve spending I'm afraid.