Time to stop letting our hard earned money slip through our fingers!

BabySteps234

Hi! I have been busily reading through other peoples diaries and had some great support on my first forum contact and have decided to attempt my own diary as my husband and I start our journey to a debt free life. A problem shared and all that!

We owe a lot! Nearly £40,000 worth of a lot! £20k on house improvements,which I foolishly put onto credit cards with the intention of it going onto the mortgage. However, once you owe that much on credit cards mortgage deals are few and far between. (Any worth having anyway!).
We had no idea the debt came to that much until about 6 weeks ago when I began wondering where all of our hard earned cash was disappearing to and decided I'd better find out! (DH was happy with his head in the sand and really, to be honest, still would prefer to be an ostrich but is going along with my plans!).

We have both been in debt and paying for things in a back to front fashion all of our adult lives (the last 20 years) and paid minimum payments on things. I have always paid on time so my credit rating wasn't affected but his had huge amounts of interest being whacked on each month and things were missed here and there so 'we' have been working on his credit score the last couple of years.

We haven't been living the highlife - This debt is historic. My debts started 12 years ago as a single Mum earning low wage and trying desperately to cling onto my house (which YEY! Thankfully I did!) but this meant I couldn't afford to buy heating oil so year on year that 6 monthly £500 went on a credit card... emergency this and emergency that to pay for with no emergency fund... all on cards and before you know it you're in debt with no spare money to pay it off! However good I was at finding free days out and second hand bits and bobs children still cost money!
DH Just a lad was university when his money problems started and he never got it paid off!
We've been together nearly 10 years (first 5yrs separate finances each too embarrassed to fess up to the scale of our debts) but since then we paid few cards off and have been dealing with it as fairly low priority, paying minimum payments but now it's time to knuckle down and get it gone!
My dream goal is to pay off £17000 in one year!!! :T (She says with a gulp at those numbers!) If we try hard to stick to plan we can do this. We have a pretty decent income but our outgoings are also high too. We hadn't ever added up our income until last month! As long as we had enough to get through each month we were ok, so to have everything in black and white has been a big mixture of emotions: We earn more than we thought but we spend and owe more than we thought too!
We had been paying £800 in debts a month but will now aim for £1500 a month. Until recently we paid £600 a month in child care so the extra £500 will come from there (instead of disappearing into the abis as it has done past few months!) so..... here goes! I'll share tips and hope you will all share your pearls of wisdom too. LETS DO THIS! :beer:

kelbel18

Good luck! Sounds like you have a good plan in place now.

BabySteps234

February 2019 - my 'light bulb' month

So this is month one of the new hardcore cut backs almost complete, in my effort to halve our debt in just one year! It's going to be a cruddy year in the fun stakes so my new fun has to be watching these big debts roll back! :rotfl:
Having to tred lightly with DH - he finds all the talk of money (lack of) when we both work so hard very depressing. He is happy for me to sort it he just doesn't want me to keep talking about it! It is depressing but making drastic changes now will improve our future happiness. Both sick of worrying and stressing about money! It has been making us ill so i'm glad to have a plan to change this.

Happiest achievement: Paid off DH NEXT card in FULL! He has literally had that account opened for 20 years!!! It's now closed ...forever! It was 29% Apr too! Paid off this list of debts this month: :j

• NEXT card £1300
• £170 car service / MOT (Owed since November!)
• £180 last big childcare bill
• Paid our usual £500 minimum payment off debts
  • Paid £50 off HP purchase - just two more to go and then that £50 can go on other things

Gone into the overdraft by £250 this month BUT did have pay off a crazy amount of debt money (proud of us for that!). Glad to have paid the car stuff too as that had been worrying me.
In addition to that I followed the advice I was given on here and started on a contingency fund for emergencies. (Aiming for £1000 as was advised). Paid £100 into that and £100 into a present account for Christmas. :T
I also used money in my Quidco account (who else loves Quidco?!) :T and used the money to get my DH something for Valentines Day... felt this was ok as technically it's free cash! I even earnt 6% back on the purchase too! :money: DH cooked me a nice valentines meal at home (usually we would go out) but this was equally lovely and saved those ££££!

All in all we are glad to have survived the month... we won't be able to pay back this much each month but happy it's given us a good boost and I did a little happy dance to see the back of that nasty NEXT account! Going to try and get rid of my MBNA credit card next month (been paying it for years!) got £1000 on it and only card which I pay interest on currently. Payday on Monday! C'mon!!! ..... month one.... survived!

enthusiasticsaver

Fantastic result to get rid of that expensive Next card. You have a good amount of spare income to chuck at the debt so that £40k will soon start to decrease. Only having one more card charging interest is good as well.

Good to see you started an emergency fund too. You are doing great.

[Deleted User]

You're doing so well! I've subscribed to cheer you on

BabySteps234

I'm after a bit of advice please.... once the MBNA card goes next month the rest of the cards are on 0% deals. I was wondering whether I continue with the minimum payments and pay the rest of the money into a high interest account? Then at the end of the 0% term I'd hopefully have gained a bit which may be enough to pay a chunk of something else off. Is this a good idea or not?
I can be disciplined and know this money is to service cards and not spend it!

BabySteps234

enthusiasticsaver wrote: »

Fantastic result to get rid of that expensive Next card. You have a good amount of spare income to chuck at the debt so that £40k will soon start to decrease. Only having one more card charging interest is good as well.

Good to see you started an emergency fund too. You are doing great.

Thank you. Hoping so - has felt unachievable until now. The spare income never seems to be that spare.... as well as the £40k also pay £250 a month on a loan of £25k which I didn't include on the £40k credit cards. That Was a family loan to help on the mortgage so have to pay £250 for the next few years there too! But I am excited to be reversing the trend - really wish we could skip forward to next year and see the new numbers as reality!

natsplatnat

BabySteps234 wrote: »

I'm after a bit of advice please.... once the MBNA card goes next month the rest of the cards are on 0% deals. I was wondering whether I continue with the minimum payments and pay the rest of the money into a high interest account? Then at the end of the 0% term I'd hopefully have gained a bit which may be enough to pay a chunk of something else off. Is this a good idea or not?
I can be disciplined and know this money is to service cards and not spend it!

Hi BabySteps! Great idea! I worked out what I would need to pay each month to clear the card when the 0% ran out and then put the difference between that and the min repayment into an account earning interest. It does depend on how long your 0% deals are for, what your balances are and how likely you will be to get another 0% deal in the future if you need to roll the balances on. If you have a card with a much smaller balance on than the others it may be worth looking at paying this down quicker so you can BT on to it in the future?


Good luck with your DFJ - I like someone with a good plan! x

enthusiasticsaver

I think if you can be disciplined saving is a good idea then clear in full before the deal ends. Won’t be much interest though.

BabySteps234

Thursday eve... shattered after another long week. Usual rigmarole of getting all the children out of the house by 07:30 to childcare and school and then hubby gathering them all back home again as I get home late. Thankfully he made us all tea so I could chill and enjoy some nice time together reading, playing and dancing round the kitchen to their random choices of music!

Need to spend more prep time on meals for the week this weekend - non of us had packed lunch today so that's cost £15 in school lunch money I don't even like our work canteen food and had to have soup that cost £4 and isn't even enjoyable. So planning for meals definitely happens this weekend: hoping this will also help with new slimmer summer body too! (Lets go all in! Trim new finances, trim new me!) .

Hubby still just 'going along with' but not thrilled with my money saving strictness. He wanted to crack on with doing up the garden and buying new plants - last weekend he was 'allowed' to get bulbs instead of plants. This weekend he has some ££ to buy a few plants as I sold a couple of his old coats on the things for sale site on Facebook. I think that's fair enough... if we sell a few bit through the month he can have that as spends just so long as my debt repayment goal stays on track. There has to be a few perks in life.

Got paid this week. Another £100 in the Christmas pot and another £100 into the contingency pot. Nothing else paid yet ( bar the min payments on the credit cards via DD) but will do that... just nice to pretend there is money in the account for a few days!!!

Come on the weekend!!

enthusiasticsaver

Keep up the good work. My husband never used to be keen on budgeting and living within it. Still isn't if truth be told but he likes the fact he was able to retire early and we have enough money to live the lifestyle we want. I have pointed out on more than one occasion if he had been looking after the finances we would have been in a totally different position as he wants to spend whenever regardless of what was in the account. Hopefully your husband will get the reasons why you are trying to get the debt down soon.