When the bottom line figure is scary! But you have to start somewhere

Lu2025

Hi, the Halifax has £3786 on it😭 its the smallest debt I have so im trying the snowball approach, my username basically states my finish date of paying off debts. 5 years is a long time, im not touching my credit cards now as we are still really in lockdown, the difficulty will be when bars and restaurants open back up and we start seeing friends 🙈

mrsmoneypenny90

The main thing is you have faced reality, that’s the scariest bit. I know you have referred to the ‘snowball method’ did you get your debt free date from putting in all your debts and available cash to throw at the debts each month? 

Also, there are two schools of thought on the snowball vs the avalanche method. Snowball is favoured by Dave Ramsay because psychologically it feels more rewarding when you pay off your smallest debt and see it has gone. The avalanche method is tackling your highest interest rate first. That way you save money in interest and pay off the debts quicker, that is the method we have gone for. Our biggest debt is a £14k Barclaycard (I mean where did we even spend all of that! 🥵 stupid) but it has a surprisingly lower interest rate (thank goodness!) 

when lockdown eventually subsides I think us debt busters have to be careful not to be like kids in candy shops and rush out to spend spend spend. I know what you mean about seeing friends though, I feel like a lot of money has been spent pleasing friends and agreeing to plans, I mean doesn’t it seem like everyone has either a wedding or hen do abroad or both!! But actually on the weekend just gone We opened up to a couple of our closest friends and it turned out they too were in a considerable amount of debt so we made a pledge to help each other and not waste money. 

Why don’t you set yourself a monthly budget for entertainment? Being realistic with the budget is the main step to success I think xx

ryanm8655

mrsmoneypenny90 said:

The main thing is you have faced reality, that’s the scariest bit. I know you have referred to the ‘snowball method’ did you get your debt free date from putting in all your debts and available cash to throw at the debts each month? 

Also, there are two schools of thought on the snowball vs the avalanche method. Snowball is favoured by Dave Ramsay because psychologically it feels more rewarding when you pay off your smallest debt and see it has gone. The avalanche method is tackling your highest interest rate first. That way you save money in interest and pay off the debts quicker, that is the method we have gone for. Our biggest debt is a £14k Barclaycard (I mean where did we even spend all of that! 🥵 stupid) but it has a surprisingly lower interest rate (thank goodness!) 

when lockdown eventually subsides I think us debt busters have to be careful not to be like kids in candy shops and rush out to spend spend spend. I know what you mean about seeing friends though, I feel like a lot of money has been spent pleasing friends and agreeing to plans, I mean doesn’t it seem like everyone has either a wedding or hen do abroad or both!! But actually on the weekend just gone We opened up to a couple of our closest friends and it turned out they too were in a considerable amount of debt so we made a pledge to help each other and not waste money. 

Why don’t you set yourself a monthly budget for entertainment? Being realistic with the budget is the main step to success I think xx

I’ve also gone with the “avalanche” approach and now everything is on 0% I’m tackling in expiry date order. I’ve found it just as psychologically rewarding. It’s turned into a bit of a game of getting ahead of the curve.

Completely agree with the point re: being careful about the end of lockdown and likewise the money spent on spending time with friends. Probably the biggest cause of my debt was being out with different groups of friends all the time, going on holidays with different groups etc.

I’m in a position where I’ll likely be in a good position by the time lockdown is properly lifted, if not debt free but still need to be careful.

Best of luck with the debt busting, will be following with interest. You’re doing great!

mrsmoneypenny90

Hi Ryan, 
I have been following your diary too, great work so far! You have done really well with the debt busting in lockdown. Just wanted to ask how long was it before you started to see 0% offers come through? They might not now due to covid and the economy 🥺

findingthisdifficult

Hi @mrsmoneypenny90
I've just stumbled across your diary, just wanted to say well done for paying off that big chunk on the Halifax card.
Mr FTD & I have a loan that we have consolidated for so many years, it's literally been in our life for over 10 years....
Hopefully it will finally be gone by the end of this year (fingers crossed)
I'll subscribe so that I can check in again, you've had a great start to your journey...long may it continue!

ryanm8655

mrsmoneypenny90 said:

Hi Ryan, 
I have been following your diary too, great work so far! You have done really well with the debt busting in lockdown. Just wanted to ask how long was it before you started to see 0% offers come through? They might not now due to covid and the economy 🥺

I got an offer from NatWest in early October last year having started to hit the debt in August, so it didn’t take long. I’d say once I’d made the first £3k dent. I also got an offer from Virgin shortly afterwards. I’d check every few months with the eligibility calculator.

I also got regular offers from my Barclaycard and MBNA. Though they did dry up after a while. Since then I’ve had offers from my existing Tesco card but no longer need to use them.

It’ll make a big difference when you do start getting the offers. Initially £20k of my total debt was charging interest. Really hard to make a dent when most of the payment was going to interest. I set all cards to £1 above minimum and then focussed on the cards that were giving me more offers with my available balance initially. This helped get the interest charging figure down and then once the offers stopped coming I targeted what was left of the highest interest cards. 

ThatKiss

Just to follow up on Ryan's post above, the opening up of balance transfer offers is really down to the lender. While I was running up debt, both Virgin and Barclaycard (which had the highest limit and was the card I ran up my debt on) were consistently giving me offers.

As I reached peak debt I opened a third card so I could shuffle the whole balance onto 0% deals at which point the offers from Barclaycard stopped and only started reappearing 18 months down the line. By contrast the Virgin card, which was up to around 90% utilisation for the best part of a year, continued to offer balance transfers throughout.

ryanm8655

ThatKiss said:

Just to follow up on Ryan's post above, the opening up of balance transfer offers is really down to the lender. While I was running up debt, both Virgin and Barclaycard (which had the highest limit and was the card I ran up my debt on) were consistently giving me offers.

As I reached peak debt I opened a third card so I could shuffle the whole balance onto 0% deals at which point the offers from Barclaycard stopped and only started reappearing 18 months down the line. By contrast the Virgin card, which was up to around 90% utilisation for the best part of a year, continued to offer balance transfers throughout.

Agreed - my Barclaycard offers dried up eventually as well. As soon as I shifted some of the debt to another card. MBNA dried up even sooner, so I just cleared that and closed the card down. The offers from them seemed to end as soon as I was making headway into the debt.

Fortunately as the offers dried up I was able to get further 0% cards instead.

mrsmoneypenny90

HAPPY HUMP DAY EVERYONE !

just checking in as I haven’t posted on my diary for a while. I am such an impatient person, probably part of the reason why I got in debt in the first place! I just want payday to come again so I can throw another chunk at the horrible HALIFAX 28.9% 😡 card. Current balance as of today is £2,085, down from £4,475 as of the beginning of May. So good progress and I need to keep remembering that.

Hubby got a promotion in January this yr, and was on a staged wage increase. He got the first £500 increase approved in March just as lockdown kicked off, and was supposed to be at a further £2,500 by the beginning of June but because of everything that’s gone on he hasn’t mentioned it. However, last week he spoke to his Manager who has approved a further £500 increased and the rest will be reviewed in the coming months. At the moment he is still on a 20% pay cut but is really hopeful that it will revert to full pay by the end of July as things seem to be picking up. We will be in a much worse position if he is still on the 20% reduction and has to start paying for fuel again travelling back into the office and the repayment holidays coming to end. At least we will have cleared the Halifax card by no later than end of July so that’s £132 we have freed up per month. 

Also, £98 left for groceries for another 15 days, should be doable providing I stick to the shopping list. Have also given up wine for 90 days ( doing the joe wicks plan) so that will save some cash too!

how is everyone else getting on? 

mrsmoneypenny90

A long overdue check in from me. To be honest, I find it hard to post when I am not really doing much debt busting, but I think I am going to start checking in more often even if it’s just to log my daily spending (yawn I know!) but it will make me focus on the smaller things and keep track better. Although, to be fair we have managed to stick to our grocery budget did the last Aldi shop today to take us to Thursday payday (the end is in sight wahoo).

also.... I just could not resist and have ended up paying the final £2,085 off the Halifax card today, it has taken us into our overdraft for two days but the small amount of interest we will pay is worth it just for my peace of mind. And wow does it feel good seeing that £0 balance on the app, just hope in a few months we will get a 0% BT offer as that will make a huge difference if we can shift some of the smaller higher interest cards on to there. We have have this horrible card for years (originally taking it out to do a balance transfer, oh the irony) and kind of just accepted the £135 payment every month before our LBM.

We have agreed that as it’s our first substantial pay off we will treat ourselves to a cheap bottle of fizz and cook a nice dinner on Thursday to celebrate and spur us on for the next one!

hope everyone else is feeling good and not giving in to the urge to splurge now shops are reopening?