Stop burying my head... £20k and nothing to show for it!

Lisa2211Lisa2211 Forumite
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So here is my first debt free diary.

I’ve been over committing my time and money. Living way beyond my means with my head very much in the sand. Not opening letters and kidding myself it’s all okay as I pay by DD so I’m never behind. Reality being I was too scared to know the figures, I was living beyond my means, spending every month well into my £2200 overdraft rarely going into the black and only ever paying the minimum on my debts.

I’d given my income & expenditure no thought whatsoever and as a result I’m sitting faced with massive credit card debts and long standing shopping accounts that I’ll still have when I’m 50 if I do nothing!

I have spent much of this last fortnight facing my figures and coming up with a plan. I’ve registered for online apps, obtained passwords, enquired about potential savings etc. I’ve begun!

So this was my August situation

Barclaycard £9077.02
Nationwide £3457.00
MBNA £1798.34
Virgin £2742.79
Next £659.05
Newday £577.40
Very £142.71
Overdraft £1600
Total £20054.31

Income £1537.00 net
Living expenses £679.00 inc childcare
Debt payments £473.00
Leaving £385.00 for food & other spends.

I’ve been reading Dave Ramsey’s strategy. My plan is to debt snowball. Using my savings to put towards clearing the overdraft first then reduce my pointless spending and whack as much to my debts as poss starting with the smallest balance first....

I want to be debt free by Sept 2023... The month my eldest starts high school.

I’ll report my progress and mindset in my first comment...
Debt Free July 2021 £20k paid off
Operation house move 2022
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Replies

  • DebtFreeMonkeyDebtFreeMonkey Forumite
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    Now you can make a real start. You've confronted your situation and it seems you're well on the way to coming up with a plan to achieve everything you'd like. I'll be following a long for the ride :)
  • Lisa2211Lisa2211 Forumite
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    So I’ve been to the credit union and withdrew my £1450 savings towards my overdraft. I’ve also moved my last £90.00 from my online saver to my current account. Guess what! For the first time in forever I’m no longer in my overdraft. Very liberating! I may not having any savings but this positive figure in my account is joyful to see. I’m so happy. I called Barclays and reduced overdraft from £2200 to £200! It’ll be the last time I pay £36 in bank charges for overdraft use.. wahoo. The lady at Barclays was great after a little chat she suggested I try to negotiate a lower interest rate on my Barclaycard and transferred me through.. as it happened they couldn’t do it this month but did suggest I call back in a couple of months to see if I can get some help.

    I did a virgin cc transfer for a promotional rate from Barclays, only £900 but it’s better then it sitting on a high interest card...

    I’ve enquired about ppi but pretty sure I didn’t have it but I’ve nothing to lose.

    I’ve also compared childcare voucher scheme and tax free childcare scheme and decided to move over to tax free childcare from Oct. all the applications have been done and I’ve projected costs for the next 12 months, I’ve over budgeted just in case but hoping the swap will save me money which can then be directed to the debts.

    I’ve enquired with Vodafone as my contract ends 22.8.19, I only pay £26 pm and I do need a new phone but I’m looking into a sim only deal or something for the time being?.. I need to work out what may be best as I’m not convinced the Vodafone store gave me all my options... apparently £15 a month is the sim only deal and I’d be committed for 3 months initially with the option to change thereafter.... bit more work required.

    Good news is from jan I will get the 30 hours childcare so can increase my debt payments by £300 a month.

    I’m hoping to list some items for sale soon too..

    I have a day out planned tomorrow for my girls but will be taking a packed lunch to cut costs.

    I’ve also been a lot more conscious about meaningful spending... let’s hope it continues....
    Debt Free July 2021 £20k paid off
    Operation house move 2022
  • cherokeecherokee Forumite
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    You’ve given me some encouragement to do the same here with my situation. Can I please ask what is Dave Ramseys strategy?
  • KaronherKaronher Forumite
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    I dont know about the agreement you have with Vodaphone but I had sim only with Virgin for £6 a month. Only half a gig of data but I think it was only £10 for 2 gig.
    Aiming to make £7,500 online in 2022
  • Lisa2211Lisa2211 Forumite
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    cherokee wrote: »
    You’ve given me some encouragement to do the same here with my situation. Can I please ask what is Dave Ramseys strategy?
    Hi Cherokee

    Dave Ramsey suggests a set of baby steps to becoming debt free and build wealth

    Generally speaking the steps begin

    0. Get current with payments this includes paying off overdraft
    1. Save an emergency fund
    2. Pay off debts starting with smallest first - idea being you snowball the payments
    Steps 3 onwards talk about building wealth etc so not relevant for me for a while!

    Personally for me I ‘get’ this method, I will take great pleasure in seeing zero balances and the journey doesn’t seem so scary when I can see that by Oct I’ll be rid of Very debt and working towards the next balance.

    Good luck Cherokee xx
    Debt Free July 2021 £20k paid off
    Operation house move 2022
  • enthusiasticsaverenthusiasticsaver Forumite, Ambassador
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    Well done on getting rid of the overdraft. Great news about the free childcare from January giving you an extra £300 a month.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected] All views are my own and not the official line of MoneySavingExpert.
    Save £12k in 2023 Challenge #8 £12,000/£5700
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  • beanieloubeanielou Forumite
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    Baby steps are great :)
    Well done on reducing the OD :)
    Happy shiny new diary.
    Lou~ Debt free Wanabe No 55 DF 03/03/14.
    **Credit card debt free 30/06/10~**
    MFW. Finally mortgage free February 2021****
    "A large income is the best recipe for happiness I ever heard of" Jane Austen in Mansfield Park.
    ***Fall down seven times,stand up eight*** ~~Japanese proverb.
    It starts with you, it starts from now. *** It is ok to be me.***
    ***Keep plodding***
    Out of debt, out of danger. ***Be the difference.***
  • Lisa2211Lisa2211 Forumite
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    So today was a pre-planned day out with my girls to a local attraction . I made sandwiches and took items in the pantry to create a picnic. The ‘old’ me would have spent £15 in Morrisons the night before buying picnic items (probably even duplicating items we already had). I genuinely can’t believe how much I’ve wasted with this attitude.. I just hope I can continue to have this mindful approach once school starts and I’m racing from one place to another like a mad head!

    I did an online grocery shop but planned the weeks meals and budget before hand :) The only thing we need is toilet roll and wipes but I’ll get those on the way to work from Aldi.

    So far so good. Payday is in 6 days and I’ve got around £60 unallocated. I’ve got £40 in my purse so that should be more than enough to cover needs between now and then, im hoping what’s left will be enough to pay for our day in London next week (planned pre budget) ...

    Need to look at September budget soon, probably tomorrow evening once my girls are asleep. Im hoping tomorrow my payslip will arrive so I know my net pay as it may be a little different with my mileage this month x
    Debt Free July 2021 £20k paid off
    Operation house move 2022
  • Lisa2211Lisa2211 Forumite
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    Thank you all for the comments & good luck wishes xx
    Debt Free July 2021 £20k paid off
    Operation house move 2022
  • savingholmessavingholmes Forumite
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    Just popping along to wish you good luck on your journey. I'm with virgin and getting about 5gb for £6.27 as I am at the end of my mobile contract - definitely worth shopping around. I am also doing my version of the DR plan.
    Target 1) Prioritise health & social connection 2) Write regularly 45,037/70,000 words Book 2 and 10,787/70,000 Priestess book 3a) Get to £10K EF/Savings Now £4,573 3b) £1.6K Savings for DD Car (Achieved) 4) MFW starting at £201999 Nov 21 with 264 249 payments to go. Now £192,304 5) Mortgage neutral progress via pension £1,887 invested since Nov 21 6) Declutter 7) Invest in fun and frolics - and not just future self! 8) CC Debt free April 22 (now stay that way!!)
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