How best to pay this debt?

[Deleted User]

kandishuffle wrote: »

Just opened a letter from Halifax today. They are increasing my interest rate to 27.45%!!!

Close the account and the rate will stay as it is while you pay off the debt.

kandishuffle

theoretica wrote: »

The Santander overdraft should be your first target - at £17 a month it is costing you about 40% - and is small to give you an early success. Throw both the £105 you have for extra debts payment and the £50 presents budget at it - it will be gone in time to then save up for Christmas, but also start thinking about cheaper thoughtful presents to give.

Yep, sounds good to me. Present budget has been slashed down to 0 for the time being. That's £175 being paid to that overdraft. I'm sure I can rustle up another £25 from somewhere, maybe my clothing budget as I have heaps of unworn clothes. I can pay this off in three months time! Thank you! :T

MovingForwards

Cut your clothes bill out for a while, unless you needs tights/smalls; I'm sure you will have enough clothes to get by for the rest of the year.

Presents, trim that right back!

Holiday - is that already booked and you are paying it off? Can you do without a holiday this year?

Get rid of the gym and Spotify, too indulgent I'm afraid.

I found it easier to have a current account completely separate to my other accounts to pay the debts out of, perhaps this may work for you?

kandishuffle

elsien wrote: »

This is not a criticism, but a genuine query.
If your costs are so low, how have you got into so much debt? That's what needs addressing moving forwards.
At 20k worth of debt, how badly you want to fix it? Because you have the option of a cheaper mobile, fewer new clothes, free Spotify, cheaper holiday, scrapping the gym and less on presents. For example.

I don't have a good answer for this, I'm afraid. It began during university - nights out, meals out, new clothes as I was trying to keep up with the rest of my friends. Then after university I couldn't find a job for a few long months. Add in keeping a car running, one that was stupidly purchased on finance, holidays and just bad decisions.

I have made a change and most of my salary is being used to pay debt for the last year and a half. As for your suggestions, gym will be scrapped. I can run outside and I have some dumbells in the shed I can dust off and use. Spotify will be cancelled just as soon as I finish replying to these posts. My holiday is already booked and paid for for this year. So I can scrap that down as well for now. My clothing budget is 0 thanks to the suggestion of the poster above. I have loads of unworn clothes so I will be okay for a while!

The one thing I can't do is change the phone. My contract runs out early 2021 which is a shame because a £9 SIM only deal is looking good right now!

Thanks for replying!

kandishuffle

combeferret wrote: »

Did you buy any expensive things for you to have all that debt? First step would be to stick some of it up for sale on Facebook Marketplace. I did the same thing last month and got £500+ for things I hadn't used in years.

Mostly it was tat and experiences such as holidays, expensive car finance payments, meals out, beauty treatments. I've already sold lots of clothes that didn't fit (I used to be bigger then) and some designer bags. That money was used to pay off a Lloyds credit card.

kandishuffle

TripleH wrote: »

It might also be worth opening another bank account BUT one WITHOUT an overdraft facility (basic account), with a bank other than Lloyds, Monzo or Santander and get your salary paid into that. This means that you can pay down the overdrafts at a pace manageable by you without a chunk of your salary being eaten up straight away in clearing the overdraft down in full.

You need to take charge here, decide what you want to pay off, and when you pay off each debt, close each account / card / loan down.

Good luck.

I think you're right. It's so depressing to get paid and see most of your salary gone to feed the overdraft. I'll have a look online to see what's on offer and yes, definitely want to steer clear of the banks I already owe!

Thank you.

kandishuffle

Deleted_User wrote: »

Close the account and the rate will stay as it is while you pay off the debt.

I did not know that was possible! That would be great. I'll give them a call tomorrow and get it closed, thanks!

kandishuffle

MovingForwards wrote: »

Cut your clothes bill out for a while, unless you needs tights/smalls; I'm sure you will have enough clothes to get by for the rest of the year.

Presents, trim that right back!

Holiday - is that already booked and you are paying it off? Can you do without a holiday this year?

Get rid of the gym and Spotify, too indulgent I'm afraid.

I found it easier to have a current account completely separate to my other accounts to pay the debts out of, perhaps this may work for you?

Yep, will cut out the clothing budget as I have plenty of unworn clothing so I reckon I will be fine for the rest of the year, like you said.

Present budget is now 0 and those funds are going towards the Santander overdraft. (As are the clothing funds).

Holiday budget is 0 as well. This was actually for next year's holiday. This year's is already booked and paid for.

Spotify will be gone tonight!

Yes, that's a fab idea. TripleH suggested it as well. It's depressing seeing your pay swallowed up. I'll apply for an account tonight and get my salary paid in there! Thank you for taking the time to respond.

kandishuffle

Loads of changes to make! I'll will post an updated SOA later tonight. Thanks to everyone that took the time to read and respond.

MovingForwards

One of my other little tricks is to 'move the pennies' from my main current account and distribute it between all my other accounts.

So my wages give me 4p in pennies and I transfer it out.

If I do food shopping and it comes to £14.06, for example, I share the 94p between my accounts.

The first 50p in the 99p goes into my dedicated debt current account and the rest between my other accounts.

It may help?
It does build up.