How to reduce debt 26 October 2020 at 2:35PM in Debt-free wannabe 11 replies 1.2K views

ReThinkMoney

Hi, I am looking for advice on reducing my debt levels down to £0.  I have had a bit of a bad time with a serious pet injury (No insurance!!!!) but all is resolved and back to reducing it to £0.

Currently I take home £1950 per month, I pay £775 towards my household bills which is split between me and my partner and then I pay a further £302.97 for personal bills as shown below.

House Share	£775.00
Insurance	£31.98
Fuel	£75.00
Phone	£36.76
Car Tax	£17.50
Gym	£25.00
HTB	£1.00
Netflix	£4.06
TV	£11.67
Work Food	£100.00
Total Bills	£1,077.97

The debts I currently have are 
Personal Loan: Balance £10,494 @ 3.2% APR - Monthly Payment of £349.80
Credit Card: £797.81 - Min Payment: £25 - 0% for another 11 months.

I put the following money away monthly to save up for up and coming expenditures such as xmas or MOT.

MOT	£20.00
Christmas	£120.00
Injection	£0.00
Presents	£60.00
Hair Cut	£10.00
Animals	£20.00
Clothes	£30.00
Entertainment	£110.00
Work Shares	£75.00
Total Savings	£370.00

This leaves me with a grand total of £135 extra every month to put towards my debts but I feel like it's going to take me AGES to get down to £0.  is there anything I am missing or any recommendations on how to reduce my debt quicker.

[Deleted User]

That's a lot of entertainment and clothes.

Are there any naked indoor hobbies you could take up instead?  Or at least make do with the clothes you currently have and watch Netflix?

£60 a month for presents is also huge, especially if the Christmas spend is on top of this.  You could easily squeeze another £200 out of that budget.

vixx_123

£120 a month for Christmas seems like a lot. It means you spend £1440 a year on one day (and £720 on presents)

Naomim

Agree on the presents & Christmas being quite high. Do you buy for a lot of friends and family?  Is Christmas to include food shopping for that period too?  I save £30 a month for presents and £70 for Christmas.  I only buy for my younger niece and nephew plus my Goddaughter for birthdays and my own two children.  Christmas I buy for my two children, my in-laws (token gifts - just got MiL 3 books for £5 from The Works) and MrM and I give each other a token gift.

Are you paying the minimum on the credit card? If you can I would up the payment even if it's just by £5 or £10 as minimum markers show on your credit record.  If it's not paid off by the time the 0% deal runs out you may not be offered another.  In the meantime, can you make overpayments on the loan? As it's interest bearing it would make sense to try and tackle that first.

Naomim

ReThinkMoney

Hi all!

Christmas and gifts are due to me not being able to save throughout the year so that is what is required over the next 2 paydays to have enough to pay for the gifts.  After December when I am able to save for 12 months I will be putting away £35 to pay for the gifts over the year.

ReThinkMoney

Deleted_User said:

That's a lot of entertainment and clothes.

Are there any naked indoor hobbies you could take up instead?  Or at least make do with the clothes you currently have and watch Netflix?

£60 a month for presents is also huge, especially if the Christmas spend is on top of this.  You could easily squeeze another £200 out of that budget.

Hi,

As above this Christmas and presents is due to only starting saving 1 month ago so that is to ensure I have enough to buy gifts, one Christmas is over I had a £35/month budget for gifts to save up for a year so that leaves me with £300 leftover every month.

sourcrates

To be fair, looking to start reducing your debts two months before christmas hits us, is a lot to ask.

Get your brain in gear and make your plan, then implement it Jan 1st.

Lets hope next year holds far fewer suprises than this year did.

ReThinkMoney

sourcrates said:

To be fair, looking to start reducing your debts two months before christmas hits us, is a lot to ask.

Get your brain in gear and make your plan, then implement it Jan 1st.

Lets hope next year holds far fewer suprises than this year did.

I always try to be prepared but 2020 got the better of me, this is the first Christmas in 5 years that I won't be dipping into a credit card, so that's a win!

DCFC79

There's alot of room there, your phone for a start. do you watch much TV to warrant the £11.67 ?

enthusiasticsaver

When you say work food and work shares.  What is that for?  Are you buying food out because it would be cheaper to take it from home.

You can probably eliminate clothes for the rest of the year and cut back on entertainment but you probably realistically will not be able to make much impact on the debt until after Christmas unless you cut back drastically on presents this year.  Justify it with saying you had a large pet bill.

What was the personal loan for?  

After Christmas make a strict budget and stick to it.  On the plus side the credit card is not huge and on 0% but I sincerely hope the loan was not previous debt consolidation.  To clear the credit card within the deal period you need to pay £72 a month so I would up that monthly repayment asap.  Any additional amounts I would overpay the loan providing you are able to do that. 

ReThinkMoney

DCFC79 said:

There's alot of room there, your phone for a start. do you watch much TV to warrant the £11.67 ?

Phone is up in April and I will be moving to a £10/month Voxi sim card.
TV is for Netflix and another online service, we don't have any other type of TV so we do save on a TV license and Sky TV for example.