I can do this...step by step

Rdpncp

Wow, where has a year gone. I cannot believe its been a year since I updated this.

So, how has the last year been for myself?
Positives and negatives.

I've cleared £7k off my debt which is great, but I'm now paying £1098 a month in minimum payments, which I cannot afford.

So why haven't I cleared £12k in the past 12 months?

Well I haven't been making up the extra each month I had planned in order to reduce debt further, in addition I struggled to clear some debts and consolidate others.

I have now cleared two high interest Credit cards onto one which is 0% interest until November 2024.

I've also not managed to put more loans together onto a smaller monthly payment without jumping the interest rate.

I'm not sure if I should have gone down that route or not, but currently in a place where I'm okay with where I am.

The main thing, the debt is not increasing, so I'm definitely not spending like before.

The extra money from my dad didn't materialise and clear 1-2 of the loans off as he couldn't pull it out of his pension fund without incurring penalties, which I'm actually really happy about. I need to do this myself and that makes me feel really positive.

I've also lately managed to secure some overtime at work which also didn't materialise last year. So far I'm getting about £3-700 per month extra after deductions which is amazing. It only started in last months pay but I should get some in April and now May pay too. Hopefully it will keep going as long as possible.

This really helps ad without overtime I'm about £300 a month short on all payments and living costs. That being said there's just 5 months left of minimum payments on 1 Loan that is £250 a month so I'm almost there.

My main focus is currently earning enough each month to stay onto of minimum payments and try to reduce the current account overdraft at the end of the month.

I have a tax refund on its way for £200, a savings account at £320 that I'm going to empty and going to sell our second car after a holiday next month.

This should be enough to clear Overdraft saving about £20 a month in interest, and it will be one less debt recorded on my signature.

My next goal is whether I can clear the M&S Loan a month early in July. I think I can.

foxgloves

@Rdpncp, Not being able to get a consolidation loan is very often a blessing in disguise. It didn't work for us. We took the first one out to gather some of our debts together into a smaller monthly payment, but like a lot of people, we then kind of psychologically felt we'd 'dealt with' our debt problem. We continued overspending our income then consolidated again. This time, we added a bit more to the loan 'just in case' & spent that too. The 3rd consolidation loan was fairly close to my debt lightbulb flaring big time & deciding I didn't want to be in debt forever (from being a 19 yr old student to into my early 40s, ditto Mr F!) 
I think consolidation loans in our case allowed us to continue spending more than we earned for several years longer than otherwise might have been the case. Our debts (35k-ish) are long paid off now but I wouldn't advise consolidating to anyone based on our experience.
Best of luck with your debtbusting. It's a great feeling once it's done, even though it takes so much longer paying it back than it does spending it.
F

Bizzywizard

Hi,

Have you tried moving bank accounts? I was with HSBC and had a overdraft that was crazy apr amount and could not get out of debt with it, so switched to Nationwide and made £125 for switching and had a £2k interest free overdraft for ONE YEAR only. Nationwide helped me get straight, but I made sure the 2K was cleared in that year otherwise the apr was awful! I have just switched again to Santander and I'm awaiting £140 for the privaliage. 

Do you pay your council tax over 12 months or 10? I have done 12 months for the past two years and like that most months are about the same. I never knew 12 months existed as an option, before Martin Lewis said.

Surveys are a basic way of making smaller amounts of money - I made around £30 a month that would go straight off the debt.

Hope the above helps in a small way!

Bizzy

Rdpncp

Hi all,

Thanks Bizzy and Fox for responses.

I'm definitely in the do not consolidate debt camp now. Looking into it would mean a larger interest rate meaning even more debt.

As I only have 4 payments left on my M&S Loan I think I can make it through and then I can afford all min payments each month without any additional income to be found.

At present I have tried survey sites but found very little income from them and while work have a bit of overtime going at present I'm definitely more comfortable doing that (I can do this from home).

I am finding myself constantly playing around with my signature and updating figures which I'll probably try to stick to just a monthly update as its the only place I'm tracking everything atm.

Rdpncp

Hi all,

So quick update for May and review of April.

Spending went OK last month, about £60 spent on luxuries I shouldn't and my overtime form for work in April has been submitted to pay end of May.

Not as much overtime as I would have liked to have achieved as only started mid-month but on course so far in May for my planned target.

Pay end of this month will cover all payments required and hopefully chip about £150 into Overdraft.

If May OT goes well then at the end of July my Overdraft will not exist anymore and I can then start putting a little bit into an emergency and Sinking Fund pot. August also last payment on M&S Loan so monthly min payments become so much more manageable. 

I also have an interview in 2 weeks and if I get that my wages would cover all min payments each month without needing overtime. The risk of this is likely to be far less option for overtime in that role, however possibility I could still do a bit of work in my current role, plus I wouldn't be starting that job until Sept so could work my backside off making most of overtime until then.

Looking back at first year since LBM I've cleared £6.5k debt but in the 4 months since then I've cleared almost £4k again. I have definitely now stopped the huge interest payments that were limiting debt reduction and also stopped non required spending and of course now getting some additional income will be the big factor in reducing debt.

At current rate of debt reduction I'm likely to be debt free in April 2025 but I really would like to aim for October 2024.

Rdpncp

Hi,

Update time.

So some unfortunate spends in May results in an £800 drop in debt from the planned £1k and the target £1.2k.

June should see less spend, some extra income mid/late month of around £400 which will go straight toward the Overdraft (being the highest rate of interest).

I'm also getting my overtime done, 10 hours in April, 14 in May and should get to 25 hours in June.

Family holiday to Wales in July but everything is paid for apart from food and petrol, but after travelling there, not much daily travel so I'm not expecting more than my work commutes for the whole week combined and food is self catering so should also not see any huge increases.

August is my last payment of my M&S Loan so that's £250 a month min payments less to worry about and more toward clearing that Overdraft and then starting and Emergency and Sinking Fund.

Hope everyone is enjoying the extended holiday weekend.

Tiredbutdetermined

You are doing brilliantly.
I have tried the consolidation route in the past but it didn’t change my mindset or spending. I am loving grafting through it this time around and I feel like the mental shift has really happened.  I get such a buzz out of paying things down and the snowball effect is amazing once it gets going. I had a £3200 credit card balance and have paid that off now so the original minimum payment now goes into savings each month

Rdpncp

Ok, so, bad news time.
Found a load of paperwork whilst decluttering house and some of my debts are worse than thought...
....I know, I know, I should have online Apps to track everything and for all but 2 of my debts I do.

So amusingly, though actually not amusingly, my starting debt at LBM Jan 2021 was £52k debt!

My signature settings also reset themselves back 3 months, I don't know why, so have taken opportunity to update everything.

Now, onto the more positive, I have a clear understanding of ALL my debts.

M&S Loan clears November 2022 rather than my thought August 2022, so only 3 additional payments (£750).

My total, non-mortgage debt now stands at just under £35k, so I have reduced debt by £17k in 17 months, so at this rate I'm on course to be debt free by May 2025.

I'm going to give myself a target of October 2024. This means £1250 a month towards debt rather than £1000 which I think is doable if I can keep overtime, extra shifts, etc going as much as possible.

Now back to tidying the house..

Rdpncp

Hi,
Further update time.
Those more experienced on here may be able to say if I have made a wise decision or not.

I was honestly struggling with 1 Credit Card and 4 Loan minimum payments and an Overdraft that I just couldn't clear.

I was paying about £1150 a month.

I have taken a debt consolidation loan.

Not too long ago I said I wouldn't, but this felt too good to pass off.

My credit card remains at 0% interest until November 2024.
The 4 previous loans were 7.2%, 3.6% and 2x 3.3% interest rates.

I've managed to clear the 7.2 and both 3.3% loans and leaving just £2500 on the 3.6% loan. I also no longer have an Overdraft and now have a £500 emergency fund.

However, I've taken a £24500 2.8% loan over 7 years with £2500 Total interest if it takes me that long to clear.

This reduces my minimum monthly payments to (325 loan 1, 193 loan 2, 60 cc 1) £578.
This is within my budget and without achieving overtime or any other income.

My plan is now to breath through the rest of July until end of August with a short family holiday. At the end of August I aim to overpay loan 2 by £307 a month so by end of year it will be clear.

Then re-assess my position after Christmas in Jan 2023 (2nd anniversary of LBM) by which time I aim to begin overpaying cc1 by £150 a month and aim to get £350 over onto remaining loan. I really would like the credit card heavily reduced before coming close to deciding to really push to clear it before 0% ends or having to do another debt shift card.

Overall I'm almost £1k more debt today than 2 weeks today, however this takes into account the additional interest rates over a longer repayment period, therefore it should reduce the more I overpay.

Overall I'm happy, disappointed I took this option, but generally feeling positive. I really do seem to have gotten a grip of my spending and managing to see reductions.

£35k with 900-1k a month reduction and still feeling positive, even if not debt free as soon as planned in previous posts.

Humdinger1

@Rdpncp although not generally recommended, you've done it with your eyes open.  Your disappointment is good because, unlike many others, I think it shows that you won't dive into the abyss of debt again.  I predict you'll be in the minority that makes this work.  Please keep posting love Humdinger xx