Will this be ok?

joshjjx

Hi, this lockdown has given us chance to reflect on our finances. I’ll post all details over weekend but would be keen to get people’s views now too. We’ve made some big financial errors in recent years and we owe around 64k unsecured. We have a joint income of 80k and due to my to my wife Going back to work full time we now have about 2k left after all other bills.do you think we can tackle this very high debt on our income or should be contact step change due to the size of our debts?

EimearF

Can you post an SOA and we can advise for your specific outgoings and income

shoppingobsessed2020

I’ve just posted my Soa, similar level
of debt and I’m pretty sure I can do it without formal help.  Good luck  

[Deleted User]

Without seeing a SOA it's difficult to say for certain but if you truly do have £2,000 left over each month then you probably can pay off your debt without resorting to some form of insolvency or possibly even a DMP.  The more you can trim from your SOA, without cutting too deep, the sooner you will get it paid off.

If you need some inspiration here is the diary of someone who managed to pay off over £100k of debt on a single income.

https://forums.moneysavingexpert.com/discussion/5575569/11-years-a-slave-end-of-my-journey-from-103-500-in-debt#latest

enthusiasticsaver

If  you have £2k left after bills then you should be able to  deal with this without a debt solution.  This depends very much though on your spending habits and your ability to stay within a budget.  Post an soa up but start looking through bank statements to see where and how much you are spending. 

sourcrates

Even if you repaid 2k a month extra to your debts, assuming you can do so without penalty, it would take at a conservative estimate, around 4 years to repay the 80k, depending on how much interest etc was charged over the same period, and thats if you can be rigid and stick to the plan.

A slightly better option would be to save the 2k a month, then when you have enough saved to repay the smallest debt, do so, and so on, and so on, its called snowballing, and gives you more options to be honest.

[Deleted User]

sourcrates said:

Even if you repaid 2k a month extra to your debts, assuming you can do so without penalty, it would take at a conservative estimate, around 4 years to repay the 80k, depending on how much interest etc was charged over the same period, and thats if you can be rigid and stick to the plan.

A slightly better option would be to save the 2k a month, then when you have enough saved to repay the smallest debt, do so, and so on, and so on, its called snowballing, and gives you more options to be honest.

I thought snowballing involved chucking all your excess money at the debt with the highest interest rate until it was paid off, then moving on to the next highest. Rinse and repeat until you become Debt Free. Not saving up and starting with the smallest. 

sourcrates

Lover_of_Lycra said:

I thought snowballing involved chucking all your excess money at the debt with the highest interest rate until it was paid off, then moving on to the next highest. Rinse and repeat until you become Debt Free. Not saving up and starting with the smallest. 

The Dave Ramsey method :

https://www.daveramsey.com/blog/how-the-debt-snowball-method-works

The method is open to interpretation, some have adapted it to use the interest rate as the one to tackle first, but this was the original Ramsey method.

[Deleted User]

sourcrates said:

Lover_of_Lycra said:

I thought snowballing involved chucking all your excess money at the debt with the highest interest rate until it was paid off, then moving on to the next highest. Rinse and repeat until you become Debt Free. Not saving up and starting with the smallest. 

The Dave Ramsey method :

https://www.daveramsey.com/blog/how-the-debt-snowball-method-works

The method is open to interpretation, some have adapted it to use interest rate as the one to tackle first, but thia was the original Ramsey method.

Snowballing from highest interest rate to lowest is the least expensive way to tackle debt.  Dave Ramsey doesn’t say anything about saving money up until you’re ready to clear the first debt. 

sourcrates

Lover_of_Lycra said:

sourcrates said:

Lover_of_Lycra said:

I thought snowballing involved chucking all your excess money at the debt with the highest interest rate until it was paid off, then moving on to the next highest. Rinse and repeat until you become Debt Free. Not saving up and starting with the smallest. 

The Dave Ramsey method :

https://www.daveramsey.com/blog/how-the-debt-snowball-method-works

The method is open to interpretation, some have adapted it to use interest rate as the one to tackle first, but thia was the original Ramsey method.

Snowballing from highest interest rate to lowest is the least expensive way to tackle debt.  Dave Ramsey doesn’t say anything about saving money up until you’re ready to clear the first debt. 

Seems pretty clear to me ;

Step 1: List your debts from smallest to largest regardless of interest rate.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.

Step 4: Repeat until each debt is paid in full.

Probebly "saving" was the wrong word, chucking as much money as you have available at the smallest debt, would have been more appropriate.

[Deleted User]

sourcrates said:

Lover_of_Lycra said:

sourcrates said:

Lover_of_Lycra said:

I thought snowballing involved chucking all your excess money at the debt with the highest interest rate until it was paid off, then moving on to the next highest. Rinse and repeat until you become Debt Free. Not saving up and starting with the smallest. 

The Dave Ramsey method :

https://www.daveramsey.com/blog/how-the-debt-snowball-method-works

The method is open to interpretation, some have adapted it to use interest rate as the one to tackle first, but thia was the original Ramsey method.

Snowballing from highest interest rate to lowest is the least expensive way to tackle debt.  Dave Ramsey doesn’t say anything about saving money up until you’re ready to clear the first debt. 

Seems pretty clear to me ;

Step 1: List your debts from smallest to largest regardless of interest rate.
Step 2: Make minimum payments on all your debts except the smallest.
Step 3: Pay as much as possible on your smallest debt.

Step 4: Repeat until each debt is paid in full.

Probebly "saving" was the wrong word, chucking as much money as you have available at the smallest debt, would have been more appropriate.

It might be clear but it’s not the most cost effective way to snowball.