"Lightbulb moment - 67k down. Need to execute a recovery plan"

BookmobileBadGirl

deed pending on what your children’s nursery is doing you may have a big saving in expenses there this month. Also with the lock down your petrol costs should plummet. 

Put all the savings you make whilst shut down into an emergency fund until you have £1,000 and then start throwing the rest at your debts

once things start going back to normal, really look at everything you spend. As £25 a month for entertainment for a family of four is very low, as is the idea that you do not spend anything on holidays.

bamgbost

made an attempt with the signature. Hope it turns up below.... That will be a reminder to hold me to account!

Fair points you have all made, with rounding up figures or stating entertainment / holiday costs. These are not consistent hence why i left them. But yh i can relook at it.

Thanks all. Will keep u posted as things change....

Mr87

This might feel like nitpicking but a couple of things I noticed: do you need to spend £40 a month on haircuts (granted 4 people in household but could you wait for your hair to grow a little longer  ) and a piece of advice on presents which I found really helpful on my own SOA - cut this down and just let people know you're not buying presents and don't expect anything either. I know this can be tricky but I honestly found people were really receptive/supportive when we did this. This will be especially true of the great friends you have who have lent you money, who will be super-appreciative once you've paid them back and know you keep your word.

bamgbost

hey Mr87.... thanks. you are right will cut down on presents tbh. Besides for the next few months we nt going out anywhere.

I have started with the friends payback..as stated in the SOA.

What I am now wrestling with is... making any overpayments to clear debts quicker vs building up an emergency fund. Esp in this day and age. I am beginning to think the emergency fund is higher priority. So long as I make the minimum payments on the debts. Does that sound right?

EimearF

bamgbost said:

What I am now wrestling with is... making any overpayments to clear debts quicker vs building up an emergency fund. Esp in this day and age. I am beginning to think the emergency fund is higher priority. So long as I make the minimum payments on the debts. Does that sound right?

Focus on emergency fund and make minimum payments on credit cards if there is any risk you will be out of a job. If nothing happens you can sue the pot of money to make a lump sum payment once all this is over. 

clairebeth

Hi there,  just checking that your benefits are child benefit? It's just that, with your take home pay being £3100 a month,  does that not put you in the 'over £50k' bracket? You may find you need to pay some (but not all) of it back.  HMRC have a calculator on their site. 

All the best!

bamgbost

EimearF said:

bamgbost said:

What I am now wrestling with is... making any overpayments to clear debts quicker vs building up an emergency fund. Esp in this day and age. I am beginning to think the emergency fund is higher priority. So long as I make the minimum payments on the debts. Does that sound right?

Focus on emergency fund and make minimum payments on credit cards if there is any risk you will be out of a job. If nothing happens you can sue the pot of money to make a lump sum payment once all this is over. 

Exactly my thoughts. I am in a relatively new job... 3 months in. Not sure how safe it is... but regardless. An emergency fund is needed.

clairebeth said:

Hi there,  just checking that your benefits are child benefit? It's just that, with your take home pay being £3100 a month,  does that not put you in the 'over £50k' bracket? You may find you need to pay some (but not all) of it back.  HMRC have a calculator on their site. 

All the best!

I believe I should be ok. due to employment deductions ( pensions, etc). I just about miss the repayment threshold. But good to bear in mind, if bonuses, etc crop along.

bamgbost

Hi ALL

So its been a good month Plus. From when I first posted. Seems this debt business is going to be painful. As I am unable to get a new 0% deal to at least reduce some of the interest.

And I think perhaps I had not accurately written the figures down. They are actually...

Name	Amount
Overdraft	1500
Paypal	1550
Cap 1 CC	1000
S  CC	960
Cap 2 CC	2700
M CC	2550
B CC	3500
H CC	4500
A Loan	8000
B  Loan	11000
H Loan	14200
RS  L	14000
Friend	900

(Rounded up).

Seems A DMP is the only way to bring this down quick. However im due to remortgage in 3 months, so not something I would look to do yet.

However in the few weeks since my last post. The total has come down by 2k ish. So thats something. But a long road ahead!

ThatKiss

Hi @bamghost,

£2k over a couple of months is good going, and as time goes by you'll find things start to speed up with 0% balance transfers becoming available and as debts drop off freeing up more cash to throw at what's left. It is hard going, especially to start with,  but remain focused and you'll get there sooner than you think.

I've had a read through your thread and one thing I would say in terms of the credit cards, is that it helps to set a standard monthly payment rather than the default minimum payment option. It makes budgeting easier as it's a set rather than variable amount, and what you're paying off the capital balance increases month-on-month rather than decreasing as a percentage-based minimum.

bamgbost

i am really hoping for a 0% balance transfer offer to come for sure.

@thatkiss , thanks for the advice on the credit card...i see how it would help with budgeting definitely.