Help Please - Want to be Debt Free

MallyGirl

I'd avoid the post office - many people hit by awful account opening processes and customer service. Admittedly mostly for credit cards but still...

enthusiasticsaver

I have the Tesco Internet saver which pays 1.45%

Kidder81

Without wanting to sound blunt, it’s obvious your SOA isn’t right. Generally when someone in debt does an SOA, it should show they are spending more than they earn, hence the debt.

As a couple, if you had over £1000 surplus each month, you’d have savings and no debt.

You have no chance of being debt free unless you admit uncomfortable truths about how much money you’ve been spending g on things. You can do a spending diary from now but I prefer going over your bank statements as that will be more honest. Add it up and I guarantee you’ll have massively underestimated how much you spend on clothes, eating out, holidays and entertainment. Only once you have the full brutal truth, can you adddress it and cut down leading to reduced debts.

LoulaBelle

I think £250 each as personal spendings is a bit high. Also eating out twice a week - aim for just once a week.

Andrew_P

Hi Folks,

Just thought I would update this thread with how I have been getting on.

So our NatWest account is now open and we are awaiting to switch from our current bank to them, which should be completed on 30th January hopefully. I have changed all of our direct debits so they will come out of the new joint account.

My wife got a credit limit of £5,500 for the money transfer card, so they transferred £5,000 to her sole account. The overdraft is cleared and she has left herself £200 for personal spend and paid £2800 to her MBNA credit card so there still is a balance of around £800 on the MBNA card. I have setup direct debits to pay the minimum payments to all of our debts and then we then can overpay as and when.

Also I have opened a Tesco Bank Internet Saver which we have transferred £50.00 to each to start the emergency fund and once our NatWest account is fully operational will setup a standing order for £100 a month to go into the Tesco savings account. We have been keeping track of what we spend through keeping receipts and writing things down which does help you see where the money goes!

I have £450 to clear from the Tesco card which hopefully can be gone next month. Would you focus on paying off this then the rest of my wife's credit card?

Thanks all

Andrew

getmore4less

There is not a massive difference in rates.
I would get the Tesco card cleared and keep it till it qualifies for the interest free period again then you have it for managing cashflow as long as it gets paid off in full.

Might even get new offers if you leave it a bit.

enthusiasticsaver

Your wife's MBNA card is charging slightly more than Tesco in terms of interest so I would focus on that initially. Not a massive amount in it though so if it motivates you to tackle the smaller Tesco card first then do that.

enthusiasticsaver

Sounds like you have a really good plan moving forward. Hopefully you will be able to clear the MBNA, Tesco and Virgin card this year then leaving the MBNA money transfer card and Barclaycard to 2020 and 2021 to clear. On around £600 a month it will take around 3 years to clear all of it assuming you do not add to the debt.

Andrew_P

Hi Folks,

Sorry not posted for a while. I have had a few personal issues to deal with and has had an impact on my journey to get debt free. I wanted to post on here as I am looking for advice as I am not sure what to do next as every time I feel like I'm making progress something happens and it's like taking two steps back. Unfortunately my wife had to resign from her job in November due to ill health and she is not currently working and its just my salary coming in.

Since I created this thread the debt currently stands at £19,000 and have managed to pay some off. It's gone up a little as we have been using credit cards to buy things

I'm thinking it would be best to do an up to date SOA?

I would be extremely grateful for anyone's advice on what the best course of action is given the circumstances.

Thanks all

Andrew

WhenIam64

Unfortunately my wife had to resign from her job in November due to ill health and she is not currently working and its just my salary coming in.

The key question is how long the drop in income will continue for. If the illness will prevent her from working again in the short term, you may need to look at a revised SOA to get an idea of free income (if any)

There are other sources of income apart from work such as benefits, and your wife may be entitled to Employment Support Allowance (ESA) based on her NI contributions. This lasts for 6 months before having to move onto Universal Credit.

https://www.gov.uk/employment-support-allowance/eligibility

Use one of the online benefits checkers to see what non-employment income your family may be entitled to as a start.