Starting my mission to become debt free - Snowballing advice

IrishSean

As other said, talk to that credit union: they meant to be for the community run by the community. I don't give a monkeys how high risk you might credit score, theres no way thats reasonable. 

Also you should get at least a month @ 0% on your overdraft; i've been to busy (read lazy☺) to find out if 0% overdrafts are being extended by the banks (as other C19 support). If they are you could get like £1000+ interest relief maybe til the end of the summer. That aside, keep making payments against them 

Do A Diary! Not just so the forum can help; if you don't you lose motivation when times get tough. I've been on the forum 3 times with different accts, once about CTC, had planned to post up about my money troubles, didn't, fell in a huge F off hole.

Do it, stick at a diary on this forum, ask those that have and then cleared debts the response will be 100 v 0!!!!

KeysMcK

I really appreciate all of this input and have already started trying to make changes. 

I’ve topped Bamboo up some extra to make it 3x as my outgoings are lower than my SOA shows at present due to lockdown. From now on though I’ll likely sit on the money and top it up bi-monthly so as not to give them free interest. 

Overdraft - monzo said I can’t have it because my salary doesn’t go into there. Barclays, I’ve not asked but as I’m currently still getting full salary I doubt they’d give me interest free. Is it worth trying anyway? 

Deleted my credit cards from Apple Pay and amazon and similar. They’re currently in a draw but I love the bowl of ice idea. Will be implementing! 

Going to have a look at those money making schemes soon. Can’t get a side job as I’m furloughed but can make money on the side. I’ve been known to buy and sell things but I don’t really have the capital right now. When bonuses come through I’ll see if I can start a trade though. Surveys etc I can defo do. 

I’m going to be putting all money I don’t currently spend (Parking, Commuting, presents etc) into my savings account for a rainy day. 

Credit Union, I honestly never really thought about it before as it was the listed interest on their “beginners loans” which I’m pretty sure you need to take And complete before applying for any further credit with them. I’ll speak to them and see what I can do! 

Diary, on here? I’m sure I can do that! 

ryanm8655

You're doing really well - keep up the good work! Look forward to checking out the diary.

Have you rounded up the DDs on the credit cards yet? 

Sorry - just realised you asked how. You need to login to your credit card online and then set up a fixed amount for the current minimum rounded to the nearest £. E.g. if the minimum payment due is £44.28 then round up to £45. It's amazing what a big difference a tiny thing like this does. Psychologically it's a boost knowing that you are paying exponentially more of your debt each month (even if it is a tiny amount) and it also helps with your credit worthiness. Plus it makes it much easier to budget as the minimum payment decreases each month, where as having a fixed amount means you know what's going out each month.

I used to see my minimum payments decreasing as an increase in my disposable income in my less sensible days, until suddenly the 0% offers end and the minimums go through the roof and you're basically just clearing interest each month. That one change was a real eyeopener for me and that's as someone who is financially literate, just a cretin with money and spending without thinking...It really helped me to get on the budgeting bandwagon. 

IrishSean

Ask Barclays about OD anyway. Bar an emergency fund I wouldn't put cash into savings as rates are pitiful and will never outstrip aprs on your existing debts.

Diary is the easy bit😉👍

greensalad

KeysMcK said:

The overdrafts I’m most wary of because it is TOO easy just to spend the money again, but at the same time I’m reluctant to get rid of them because they’re a good emergency safety net and they also can help my credit file when I finally come around to buying a house. It’s frustrating. 

Monzo overdraft should be quite easy to pay down because you can do it incrementally in-app. Every time you pay a nice chunk off, drop it by £50 so it physically can't be respent.

KeysMcK

I’ll kick off the diary tomorrow.

Theres potentially a blow to my plans though that could really turn this all on it’s head. Until now I’ve been furloughed on full pay. Just been informed that this will be reduced to 90% July and 80% August (although they’ve said they’d like to bring us back on a part time basis, which would be paid at 100% for the days work that may soften the blow.)

Im hoping I can weather this, however I’m starting to regret the snowball payments I’ve already made to bamboo as they could have been very useful in July/August. 

I think this small inconvenience potentially being disastrous is a real eye opener. With my income I shouldn’t be struggling, and with my income I should be able to weather a couple of months of reduced pay. Very angry at my past self for putting me in this position! 

KeysMcK

ryanm8655 said:

You're doing really well - keep up the good work! Look forward to checking out the diary.

Have you rounded up the DDs on the credit cards yet? 

Sorry - just realised you asked how. You need to login to your credit card online and then set up a fixed amount for the current minimum rounded to the nearest £. E.g. if the minimum payment due is £44.28 then round up to £45. It's amazing what a big difference a tiny thing like this does. Psychologically it's a boost knowing that you are paying exponentially more of your debt each month (even if it is a tiny amount) and it also helps with your credit worthiness. Plus it makes it much easier to budget as the minimum payment decreases each month, where as having a fixed amount means you know what's going out each month.

I used to see my minimum payments decreasing as an increase in my disposable income in my less sensible days, until suddenly the 0% offers end and the minimums go through the roof and you're basically just clearing interest each month. That one change was a real eyeopener for me and that's as someone who is financially literate, just a cretin with money and spending without thinking...It really helped me to get on the budgeting bandwagon. 

Yes, I’ve set up payments a few quid above minimum. Thanks for that tip. Hadn’t thought about the fact that this would start becoming more effective monthly. 

I’ll reach out to Barclays tomorrow about the 0%apr though. 

Monzo OD is the second debt I’ll be addressing, and the app should make this easier! The other option is to put the card in ice and delete the app. Monzo is great when you’re abroad but aside from that I have no real use for it. I’m hoping I’ve changed my mindset away from seeing OD as my own money. To be honest I’m hoping there will be a change to the OD rates again too, with us heading into a financial crash I don’t think banks can justify charging 40%! 

ryanm8655

KeysMcK said:

ryanm8655 said:

You're doing really well - keep up the good work! Look forward to checking out the diary.

Have you rounded up the DDs on the credit cards yet? 

Sorry - just realised you asked how. You need to login to your credit card online and then set up a fixed amount for the current minimum rounded to the nearest £. E.g. if the minimum payment due is £44.28 then round up to £45. It's amazing what a big difference a tiny thing like this does. Psychologically it's a boost knowing that you are paying exponentially more of your debt each month (even if it is a tiny amount) and it also helps with your credit worthiness. Plus it makes it much easier to budget as the minimum payment decreases each month, where as having a fixed amount means you know what's going out each month.

I used to see my minimum payments decreasing as an increase in my disposable income in my less sensible days, until suddenly the 0% offers end and the minimums go through the roof and you're basically just clearing interest each month. That one change was a real eyeopener for me and that's as someone who is financially literate, just a cretin with money and spending without thinking...It really helped me to get on the budgeting bandwagon. 

Yes, I’ve set up payments a few quid above minimum. Thanks for that tip. Hadn’t thought about the fact that this would start becoming more effective monthly. 

I’ll reach out to Barclays tomorrow about the 0%apr though. 

Monzo OD is the second debt I’ll be addressing, and the app should make this easier! The other option is to put the card in ice and delete the app. Monzo is great when you’re abroad but aside from that I have no real use for it. I’m hoping I’ve changed my mindset away from seeing OD as my own money. To be honest I’m hoping there will be a change to the OD rates again too, with us heading into a financial crash I don’t think banks can justify charging 40%! 

Good work!

Thats really crap about the reduced wage, even if only temporary. Are there things you can adjust in your SOA to reduce the impact a bit? In the short term, as long as you can cover the DDs and avoid adding to your debt then that’s the important thing. 

The other thing is I guess it won’t quite be a 10/20% deduction once tax and deductions have been accounted for, as your tax burden will decrease a bit too.

I know what you mean re: past self but we are where we are and at least you’ve had that realisation. I know plenty of people who haven’t and will probably live a life of being in a lot of debt.

Thats a real kick in the nuts when you’re doing really well. Don’t beat yourself up though, these are difficult and unique times. A lot of people are really struggling.

enthusiasticsaver

KeysMcK said:

I’ll kick off the diary tomorrow.

Theres potentially a blow to my plans though that could really turn this all on it’s head. Until now I’ve been furloughed on full pay. Just been informed that this will be reduced to 90% July and 80% August (although they’ve said they’d like to bring us back on a part time basis, which would be paid at 100% for the days work that may soften the blow.)

Im hoping I can weather this, however I’m starting to regret the snowball payments I’ve already made to bamboo as they could have been very useful in July/August. 

I think this small inconvenience potentially being disastrous is a real eye opener. With my income I shouldn’t be struggling, and with my income I should be able to weather a couple of months of reduced pay. Very angry at my past self for putting me in this position! 

I had heard the furlough scheme was being reduced. As I understand it though the employers are supposed to be contributing more but if you have been on full pay the government has been paying 80% so presumably your employers have been paying 20% and can't go above that. The reduction is because the government are reducing their contributions as the economy opens up again. I think the virus has opened many eyes to their vulnerability when they have high debt. At least you are doing something about it. 

i still think it was a good idea to overpay Bamboo. 

KeysMcK

What do you normally include in your diaries, is it just a carbon copy of what I posted here (SOA, plan etc?)