Finding a future after debt

ceremony

mark55man said:

Excellent plan - I would suggest doing your weekly spend on it, and then paying it off every week - if you are allowed to make multiple payments without penalty.  just one less risk of ending up a bit short

That's a good idea! I've set up the mobile app and there's a facility to make payments there, but I haven't got the paperwork yet to find out what their terms are.

My plan was to use a spare bank account exclusively for the card's direct debit. I've got a basic bank account with the Co-op that I never use because it didn't come with a contactless card. I could transfer the money for the weekly shop over to it and then just let the DD handle it. I'll see how it goes the first few weeks. Paying it off weekly will make any accidents/going over the limit less likely though.

Retireinten

Just read your diary and I think you're doing really well, you should be proud of your progress!

In your opening post you said you are a council tenant and would eventually like to buy your property and take advantage of the discount. I looked into this for a family member a few years ago and I was told by the banks I spoke to that you can use the discount as your 'deposit' so you may not need to save anything other than your legal and search fees etc. I know its a while away and you will need a decent credit history to get a mortgage but thought I'd mention it!

ceremony

Retireinten said:

Just read your diary and I think you're doing really well, you should be proud of your progress!

In your opening post you said you are a council tenant and would eventually like to buy your property and take advantage of the discount. I looked into this for a family member a few years ago and I was told by the banks I spoke to that you can use the discount as your 'deposit' so you may not need to save anything other than your legal and search fees etc. I know its a while away and you will need a decent credit history to get a mortgage but thought I'd mention it!

Thanks! It will be 2024 by the time my history is completely clean. I'm self employed too so will need to spend some time in the next couple of years looking at the best way to make my income appealing to lenders. If they will count the discount as a deposit that would be a very low LTV and it's a small house in an inexpensive area too so the mortgage would be tiny.

It's certainly a nice feeling for it all to be within reach after having a lot of horrible years financially.

Sarahwithlove

That's great well done must be nice to see the default drop off your file. If you are self employed it may be worth having some kind of deposit as well to go with the discount on the property but nearer the time you can look into mortgage broker as they will be able to get you the best mortgage. 

ceremony

Thanks @Sarahwithlove! The plan for the next year or two is to build up an emergency fund and clear the debts. That will leave two years to build up a deposit while waiting for the CCJ to drop off. I know it's possible to get a mortgage with a CCJ but we're starting from a negative net worth (no savings at all) so the time saving will be good for us!

This house is really cheap at the moment so hopefully it would be a very small mortgage. Of course, in four years a lot could change with the housing market!

Sarahwithlove

True but even with the discount you'll still pay less then you would if you brought new or anything. I think its a good plan you have in place. One of things my mortgage advisor told me was to go frugal for 6 months before applying for my mortgage and be prepared to carry on until sale has been finalised. It will help with the affordability criteria apparently. 

ceremony

Sarahwithlove said:

True but even with the discount you'll still pay less then you would if you brought new or anything. I think its a good plan you have in place. One of things my mortgage advisor told me was to go frugal for 6 months before applying for my mortgage and be prepared to carry on until sale has been finalised. It will help with the affordability criteria apparently. 

That's good to know, thanks! I live a pretty minimalistic lifestyle already really but will watch out for lifestyle creep over the next few years!

moneyonmymindsam

You've done brilliantly to clear your debt by a quarter in only 5 months.
Hope all is well your end. 
  

ceremony

Tanks @moneyonmymindsam! Lockdown is starting to grate a little and I'm struggling to focus on work these days, but it's almost over! I'm probably not even going to do much different when the restrictions get relaxed because I hate the Christmas shopping crowds, but just knowing the option is there will be good for my mood.

I hope you're doing OK!

Quick monthly update:

Debt Jun 2020   Current

CT    5144    3760 (that includes this year's)
Rent    240    0 (arrears)
CCJ  445    325 (has arrangement)
CCJ    543    370 (being paid back but no arrangement)
Three    40    0
Three    261    236 (has arrangement)
PDL   340    0 (has arrangement)
PDL    114    114 (need to contact)
PDL    200    180 (being paid back but they haven't agreed to arrangement yet))
Washer    509    509 (need to contact)
Business    2200    1714  (not defaulted)

Starting Total: 10,036    
Now: £7,208

I'm not sure if I'll make the goal of breaking below £7,000 before the end of the month but it should be close.   It depends whether I get paid this week or next for the extra work I've been doing.
I made a bit of a start with Christmas shopping this week. I think I've got one friend sorted with two little gifts, totalling £11 - one that they'll LOVE and one that they'll laugh over because it's an in-joke. I'm struggling with everyone else because online shopping isn't my preferred way of doing things, but I'm optimistic inspiration will strike. Fortunately there's only a few people to buy for and some of them would probably be elated to get gift vouchers to buy video games with.

t2rry

Excellent Christmas shopping @ceremony! I’ve definitely learnt over the years to strike when the inspiration does because too many times I’ve missed out on doing/getting something just in case I think of better, then don’t think of better at all!!!