32k in credit card debt where do I start??

IrishSean

Ryan good spot, I didnt calculate up the insurance; over £700 is a lot. If your 1980 username means ur 40 this year you should b able to bring that way down. I insure my 2007 A6 in my wife's name, fully comp, business use, 10k miles a year, protected ncd, new quote via go compare is £179 for the year, £250 excess, insured by go compare for free so claim wud = no cost. 

I had a quick look, saw a Seat Altea, 1.9 diesel (best engine ever built, imho). 173k miles full mot, grey, big alloys, on at £1100 but £1k wud buy it. Has to be similar near where u live. You've said yours is worth 6... might b a bit optimistic, but any thousands your way is a big plus. 

Like £4.5k your way, cost to change, is 10% of your debt wiped instantly. 

monetxchange

leroy1980 said:

How did you clear your debt in such short a time?

I was lucky in that I got a decent increase in income, but what I did do was make the absolute most of it. I lived (and in the main still do) extremely frugally, spending like I was on minimum wage - because in reality the money wasn't my own because I had so much debt. I didn't spend on clothes, going/eating out etc unless it was absolutely necessary. Then it was all budgeted for. It is a hard slog but worth it to not be in the position of being terrified of what's round the corner financially as I was for many years. Ryan has given some great advice on this thread and has cleared an amazing amount in a short time, so make sure you check out his diary.

The reality of your SOA is you're spending too much, and probably more (that's the debt). £100 on clothes, big cable bills, £400 on groceries, £200 on misc frittered away money. That's not maintainable on double your income. You've also said you have high ticket expensive items to sell. Check out Dave Ramsey's baby steps for inspiration. If you made a real go of it for a year or so, you could massively get down this debt. Lower all your bills, stop spending on things you want rather than need, sell everything and anything that will make a couple of quid (still do this myself every couple of months). Then you can start afresh when debt free. Anything you want then can be budgetted and saved for. You have to learn how to live within your means now or else this will be a recurring theme five years down the line.

In the long run, is there any scope for moving closer to work? 70 miles a day is pretty far. And would your GF consider chipping in a monthly amount for food shopping/a bit of bills if she's there all the time but not ready for moving in full time?

leroy1980

monetxchange said:

leroy1980 said:

How did you clear your debt in such short a time?

I was lucky in that I got a decent increase in income, but what I did do was make the absolute most of it. I lived (and in the main still do) extremely frugally, spending like I was on minimum wage - because in reality the money wasn't my own because I had so much debt. I didn't spend on clothes, going/eating out etc unless it was absolutely necessary. Then it was all budgeted for. It is a hard slog but worth it to not be in the position of being terrified of what's round the corner financially as I was for many years. Ryan has given some great advice on this thread and has cleared an amazing amount in a short time, so make sure you check out his diary.

The reality of your SOA is you're spending too much, and probably more (that's the debt). £100 on clothes, big cable bills, £400 on groceries, £200 on misc frittered away money. That's not maintainable on double your income. You've also said you have high ticket expensive items to sell. Check out Dave Ramsey's baby steps for inspiration. If you made a real go of it for a year or so, you could massively get down this debt. Lower all your bills, stop spending on things you want rather than need, sell everything and anything that will make a couple of quid (still do this myself every couple of months). Then you can start afresh when debt free. Anything you want then can be budgetted and saved for. You have to learn how to live within your means now or else this will be a recurring theme five years down the line.

In the long run, is there any scope for moving closer to work? 70 miles a day is pretty far. And would your GF consider chipping in a monthly amount for food shopping/a bit of bills if she's there all the time but not ready for moving in full time?

Really appreciate the feedback, just got my broadband down from £41 to £26.  Sky is next, I feel really positive with all the helpful feedback from people.  I tended to sit on a night time bored and making purchases I didn't need, and these all mounted up.  Ive removed all cards from my PayPal account bar my debit.  Also I will be keeping my debit card in my safe so I'm not tempted to spend.  Also getting my food spending under control, and I will be looking at my car possibly getting something more economical but at the moment probably till September ill be working from home so will save on fuel that way.
I think I'm going to pay the Next off first as I'm selling my laptop, Very is on interest free for a few months so will be hitting the Amazon newday next.

leroy1980

I rang my Amazon card up today, and asked if I could get some support.  Unfortunately the relevant department are closed today buy he asked if I wanted a payment plan?.  What I was going to ask for is to try and get a temporarily freeze on the interest so I can try an get this card paid off first.  Is this the right way to go? I am then going to ring up MBNA for my chard that's charging interest, would that be a good idea to get the interest frozen also or get a plan so I can focus on the Amazon card?  Just not sure 

ryanm8655

I can’t advise re: asking for an interest freeze in the short term. Have no experience of that, personally.

The first thing I did was set out all of my debt in a spreadsheet including expiry dates and minimum payments. Then set out my income and essential outgoings (a bit like you have in your SOA but in a spreadsheet) to work out what was disposable income. I then set all DDs to minimum plus a quid or so. Set a realistic budget for groceries etc. and allocate the rest to the highest interest card on payday. 

If you are wfh until September then you should be able to cut outgoings down to the bare minimum. Personally I’d dedicate your time in the short term to selling stuff. I find that helps fill that need to buy stuff out of boredom. By selling stuff you could be in a far better position by the time you go back to the office.

If you can convince lenders to freeze interest in the short term then that will help but my focus would be on the things you can control (what you spend and what you can do to generate money in the short term).

IrishSean

Amount short for making debt repayments. -546.58

Are those the minimums you've listed in your SOA?
Debt management charities often call CC companies with client's consent & have a high degree of expertise in putting a plan in place.
It's where i'd start
Danger is you try to make small trims but you've £500 - £600 extra to find
Emergency fund is a must as well; can't put any extra spend on credit
I can see the insistence on realism: your reckoning was £32k but its closer to £46k
You haven't mentioned an overdraft; how's your current account, is it usually in the black?
GL fella

BabyStepper

Irish sean...just wanted to say thanks for pointing out that OP is not solvent and that needs to be the first step, before any plans to pay off debt are made. £546.58 is a lot of cash to find every month so OP can stop using the cards. As others have suggested, cut the cable, stop the spending on clothes and sort out the car situation. Get your girlfriend to contribute towards food. You can't afford £400 per month on food. Along with your petrol money you should be able to get solvent for now.  

Talking of which, you may have to have a conversation with your g/f about why you can't afford things like you used to. That will depend on your relationship, but pressure to keep up appearances doesn't really work when you're trying to get a handle on your finances. 

You have things to sell so that's good. I'd go for the quick wins of paying off smallest debts, to give you a boost and know that you can do it, next and very, high interest and small balances. After that you will need to wait for the 0% deals to arrive and that will take a few months of reducing your debt. Keep your cards, you'll need them later for balance transfers, but take them out of your wallet and put them away somewhere. Take note of when the 0% deals end, you'll be in a race to pay them off in order of the dates approaching. 

After the initial rush of selling your stuff and organising your budget it will be a long, slow slog to clear the rest. I think you can do it. There are lots of positives here, you have a decent wage, you are a homeowner so no worries about saving a deposit or anything like that. When we're out of lockdown you can take on a second job or whatever to speed up the process. 

One last thing, it takes time to get to grips with a budget. You will mess up time and again, bills will appear you'd forgotten about and you'll need to add them in. You also need an emergency fund for the unexpected things. All of this takes time so don't be too hard on yourself, just keep going. You're learning skills for life here. It's not just about paying off debt, but about improving your financial position, and that will continue after the debt is gone.  

We're all here to help, we;ve all been through it and this place has been invaluable to me. Use the forums, start a diary, you can do it. 

Good luck.   

IrishSean

BabyStepper said:

Irish sean...just wanted to say thanks for pointing out that OP is not solvent and that needs to be the first step, before any plans to pay off debt are made. £546.58 is a lot of cash to find every month <*I'm not being pessimistic, just trying to inject some realism for OP*>  so OP can stop using the cards. As others have suggested, cut the cable, stop the spending on clothes and sort out the car situation. Get your girlfriend to contribute towards food. You can't afford £400 per month on food. Along with your petrol money you should be able to get solvent for now.  <*Agreed*>

Talking of which, you may have to have a conversation with your g/f about why you can't afford things like you used to. That will depend on your relationship, but pressure to keep up appearances doesn't really work when you're trying to get a handle on your finances. 

You have things to sell so that's good. I'd go for the quick wins of paying off smallest debts, to give you a boost and know that you can do it, next and very, high interest and small balances. After that you will need to wait for the 0% deals to arrive and that will take a few months of reducing your debt. Keep your cards, you'll need them later for balance transfers, but take them out of your wallet and put them away somewhere. Take note of when the 0% deals end, you'll be in a race to pay them off in order of the dates approaching.  <*Agreed. Others suggested cutting CCs up; i'm not keen on that as cards and numbers needed for balance transfers that may come but could be quite a bit down the line*>

After the initial rush of selling your stuff and organising your budget it will be a long, slow slog to clear the rest. I think you can do it. There are lots of positives here, you have a decent wage, you are a homeowner so no worries about saving a deposit or anything like that. When we're out of lockdown you can take on a second job or whatever to speed up the process. <*I would still encourage OP to get help & advice from a debt help charity; ultimately he can choose to accept or reject their ideas but he'd have input into putting that plan together; if contacting CC companies anyway, why not consult the experts?*>

One last thing, it takes time to get to grips with a budget. You will mess up time and again, bills will appear you'd forgotten about and you'll need to add them in. You also need an emergency fund for the unexpected things. All of this takes time so don't be too hard on yourself, just keep going. You're learning skills for life here. It's not just about paying off debt, but about improving your financial position, and that will continue after the debt is gone.  

We're all here to help, we;ve all been through it and this place has been invaluable to me. Use the forums, start a diary, you can do it. 

Good luck.   

It can be done; it's seismic shift time though; if those 0% CCs catch up & start to run out, things could get bad.

OP has posted some updates & clarifications but others such as when all 0%s run out, overdraft if any, likely input from GF, potential for secondary income, % of total debt utilised (balance v's credit limit), expected timeframe, details of mortgage products (a drop-off onto base rate could ramp the mortgage payment) all needed if forum is to accurately assist (imho).
I cut my monthly outgoings (dds) from £1440 to £295 for a family of 6. Only £395 (@ max) of that was mortgage (now cleared); it can be done as lots of diaries prove.

You can do it!😀💪 

IrishSean

I'm going to bow out graciously from the thread; I hope OP doesn't feel i've been OTT.
I do hope he posts a diary though; if so i'll definitely bookmark and read updates on the journey.
Very best of luck again
👍😀

Fairypop

Well done for taking the first step.  I can't advise as am in the same position but one thing I would really watch is the Very - particularly if you have them on the buy now pay later as the interest is astronomical if you miss the interest free period, it practically doubles the debt.  I forgot once and ended up paying so much money for a Dyson!  If I was you I would probably clear the Very and Next on a credit card if you have any space and then shut both accounts down.  Just to reduce number of options to build it up again.